TITLE
Recommendation to approve the Fiscal Year 2018 fourth departmental and fund budget appropriation adjustments in accordance with existing City Council policy. (Citywide)
DISCUSSION
On September 5, 2017, the City Council adopted the Appropriations Ordinance governing the City’s Adopted Budget for Fiscal Year 2018 (FY 18). 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 18 General Fund Expenditure Budget Adjustments.
This matter was reviewed by Deputy City Attorney Amy R. Webber on November 30, 2018.
TIMING CONSIDERATIONS
The following requests for adjustments to FY 18 departmental and fund appropriations are necessary to reflect changes in operating conditions. City Council action is requested on December 18, 2018, to enable the timely processing of budget adjustments.
FISCAL IMPACT
FY 18 Appropriation Adjustments
Disaster Preparedness and Emergency Communications
1. Increase appropriations in the General Grants Fund (SR 120) in the Fire Department (FD) by $72,652, offset by a reallocation of Homeland Security grant funding.
Increase appropriations in the General Grants Fund (SR 120) in the Health and Human Services Department (HE) by $81,479, offset by a reallocation of Homeland Security grant funding.
Decrease appropriations in the General Grants Fund (SR 120) in the Disaster Preparedness and Emergency Communications Department (DC) by $92,794 offset by a reallocation of Homeland Security grant funding.
Decrease appropriations in the General Grants Fund (SR 120) in the Police Department (PD) by $29,577 offset by a reallocation of Homeland Security grant funding.
In March 2016, the City Council approved the City’s Federal 2015 Urban Area Security Initiative Program (UASI 2015) grant award for $5,377,994. The City accepted additional funding in November 2017 in the amount of $6,787,370 under this contract through a first amendment to increase total allocation to $12,165,364. Subsequently, the City accepted a second amendment on October 9, 2018, which extended the performance period to July 31, 2018, and increased funding by $893,056 for a total allocation of $13,058,420. This budget adjustment will bring appropriation for participating departments to the final approved grant amount. No appropriation adjustment is necessary for the Harbor Department’s portion of the UASI grant change.
Economic Development
2. Increase appropriations in the Belmont Shore Parking Meter Fund (SR 136) in the Economic Development Department (ED) by $33,216 for custodial services payments, offset by FY 18 revenues received.
In FY 18, the Belmont Shore Parking Meter Fund incurred $33,216 in additional custodial services within the Belmont Shore area. Higher than anticipated revenues were received, which will be used to offset the additional costs.
3. Increase appropriations in the General Fund (GF) in the Economic Development Department (ED) by $98,235 for administrative costs associated with the disposition of former Redevelopment properties, offset by fees collected during the property sales.
The Economic Development Department receives a 5 percent administrative recovery fee for the sale of each former Redevelopment property. The costs incurred by the Department in managing and maintaining the properties until they are sold are offset from the fee revenue.
4. Increase appropriations in the General Fund (GF) in the Economic Development Department (ED) by $521,986, for real estate and property services provided to City user departments, offset by funds available.
In previous fiscal years, the Economic Development Department (ED) charged City departments to manage real estate and provide property services. This included staff time for the negotiation of leases, assisting departments with site plans, executing disposition of City-owned property, assisting with the development of revenue-generating opportunities on City-owned property, navigating licensing and permitting requirements, preparing property listings or requests for proposals, and proprietary data licenses among other activities. In FY 18, to promote real estate and revenue development citywide, ED discontinued the process of charging user departments for these services with the intent to offset the costs with new revenue and resulting in indirect savings citywide in the General Fund. This appropriation increase is requested to budget for the cost of services previously transferred out to departments and is offset by citywide departmental savings.
5. Increase appropriations in the General Fund (GF) in the Economic Development Department (ED) by $655,428 for direct costs associated with the maintenance or beautification of City-owned properties, and the unfunded administration of real estate transactions, offset by revenue generated from the lease of City-owned properties, revenue sharing agreements, and funds available.
In FY 18, the Economic Development Department (ED) incurred approximately $655,428 in unbudgeted expenditures from the beautification of City-owned properties, and unfunded administration of real estate transactions. An appropriation increase is needed for these expenses offset by additional General Fund revenue due to the favorable performance and creative use of City real estate assets and funds available. Increased revenue was generated from rent adjustments to ground leases such as the Long Beach Towne Center, marketing and promotion of vacant City-owned properties for special events, construction staging, and event parking.
6. Increase appropriations in the General Fund (GF) in the Economic Development Department (ED) by $432,770 for the direct costs associated with the Community Hospital Long Beach and the Armory, offset by revenue generated from the lease of City-owned properties, revenue sharing agreements, and funds available.
In FY 18, the Economic Development Department (ED) incurred approximately $432,770 in unbudgeted expenditures from inheriting the maintenance of the Community Hospital Long Beach and the Armory. An appropriation increase is needed for these expenses offset by additional General Fund revenue due to the favorable performance and creative use of City real estate assets and funds available. Increased revenue was generated from rent adjustments to ground leases such as the Long Beach Towne Center, marketing and promotion of vacant City-owned properties for special events, construction staging, and event parking.
Fire
7. Increase appropriations in the General Fund (GF) in the Fire Department (FD) by $2,920,477 for overtime expenses related to staffing assistance for California wild land fires, offset by reimbursement revenue from the State of California.
The Fire Department provided staffing assistance for California wild land fire events during FY 18. As the overtime expense for backfilling the employees who provided support for fighting these wild land fires is unbudgeted, an appropriation increase is necessary and will be offset by reimbursement revenue from the State of California.
8. Increase appropriations in the General Fund (GF) in the Fire Department (FD) by $100,195 for overtime expenses related to providing staffing at special events, offset by revenue from production companies and event promoters.
The Fire Department provided staffing at various special events throughout the year, including the Grand Prix and filming for various movies, commercials and television programs. In FY 18, additional larger events were staffed than what was budgeted; therefore, an appropriation increase of $100,195 is needed for the unbudgeted staffing costs, offset by reimbursement revenue received from production companies and event promoters.
9. Increase appropriations in the General Fund (GF) in the Fire Department (FD) by $228,717 for expenses related to development and delivery of training at the Long Beach Fire Department Regional Training Center, offset by revenue from student enrollment fees and East Los Angeles College.
Throughout the fiscal year, instructors delivered training to Long Beach Fire Department employees and members of the fire service from other departments. An appropriation increase of $228,717 is needed as the actual training costs exceeded the budgeted amount. This increase is fully offset by fees paid by students enrolled in Training Center courses and by revenue received through the City’s Instructional Services Agreement with East Los Angeles College.
10. Increase appropriations in the General Fund (GF) in the Fire Department (FD) by $1,204,928 to adjust for a correction to the Port MOU for Fire Services, offset by set aside for this purpose and funds available.
The Fire Department charges for services provided to the Harbor Department (Port) through an annual MOU with the Port. In FY 18, an error in the budgetary entry of the MOU was made in the system and this appropriation increase is needed to correct that entry error. The issue is only associated with FY 18 and is offset by funds set aside for this purpose and by funds available.
11. Increase appropriations in the General Grants Fund (SR 120) in the Fire Department (FD) by $56,119 to implement video-based Chemical, Biological, Radiological, Nuclear, and/or Explosive (CBRNE) 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. Subsequently, the City Council approved a total of $210,000 of additional funding from the granting agency, for a total award of $789,491. Recently, the granting agency has awarded an additional $59,119, bringing the total grant award to $845,610. These additional funds will fund the Training Delivery Model (TDM), a video-based training to more effectively respond to incidents involving CBRNE agents. An appropriation adjustment is requested for the Fire Department to fund grant-eligible expenditures within the grant performance period.
Health and Human Services
12. Increase appropriations in the CUPA Fund (SR 131) in the Health and Human Services Department (HE) by $18,610 for additional staffing costs to meet performance targets, offset by funds available.
The Certified Unified Program Agency (CUPA) is designed to consolidate and administer hazardous material permits, inspections, and enforcement activities, throughout the City’s jurisdiction. This appropriation increase reflects the actual costs of staffing needs to meet the City’s performance targets, which include quotas for annual inspections and standards for responding to, and remediation of, violations as set by the California Environmental Protection Agency.
Human Resources
13. Increase appropriations in the Insurance Fund (IS 390) in the Human Resources Department by $488,710 for property insurance payments related to the Queen Mary, offset by funds available and revenue received from Urban Commons.
Property insurance payments for the Queen Mary are paid for by the Human Resources Department and are offset with revenue from Urban Commons, the development company in charge of rehabilitating the ship. A budget adjustment is needed to align insurance payment costs with the budget. This increase is offset by revenue received from Urban Commons in the amount of $399,164, with the remainder offset by funds available in the Insurance Fund. The Department has experienced a lag in payment from Urban Commons but it is anticipated that additional revenues will be received going forward to cover Queen Mary insurance costs.
14. Increase appropriations in the Insurance Fund (IS 390) in the Citywide Activities Department (XC) by $1,012,000, to fund additional citywide workers’ compensation claims and align budget to actuals, offset by funds available.
The Insurance Fund accounts for and finances all risk management-related and insurance activities citywide. The Workers’ Compensation program is required by law to provide employees with the medical treatment needed to recover from a work-related injury or illness, partially replace the wages lost while recovering, and help employees return to work. There has been an increase in citywide workers’ compensation claims and an appropriation increase of $1,012,000 is needed to align the actual claims with budget. These claims are offset by funds collected for this purpose into the Insurance Fund through the workers’ compensation overhead rate.
Library
15. Increase appropriations in the General Grants Fund (SR 120) in the Library Services Department (LS) by $399,574, offset by funds available.
The Long Beach Public Library has received revenue from JetBlue in lieu of fines for noise violations since 2007. These revenues help supplement the library’s materials and books.
Parks, Recreation and Marine
16. Increase appropriations in the General Fund (GF) in the Parks, Recreation and Marine Department (PR) by $24,838, to reimburse First Serve, Inc., for improvements to the El Dorado Tennis Center, offset by funds reserved for this purpose.
The Parks, Recreation and Marine Department (PR) has two tennis centers, Billie Jean King (BJK) and El Dorado Park. First Serve, Inc., has a permit for the operation and management of both tennis centers. All revenue derived from the tennis concessions are deposited into the City‘s Tennis Reserve account. All expenditures from this reserve must be expended for the purchase, maintenance, operation, or improvement of grounds, buildings, structures, equipment or facilities for public tennis. Pursuant to reserve requirements, both tennis centers have made various improvements for a total cost of $24,838. A budget adjustment in the amount of $24,838 is requested to reimburse First Serve, Inc., for the improvements, offset by funds from the reserve.
17. Increase appropriations in the Special Advertising and Promotion Fund (SR 133) in the Parks, Recreation and Marine Department (PR) by $15,906 for the 2018 Municipal Band Summer Concert Season, offset by sponsorship and private donations revenues.
Increase appropriations in the Tidelands Operations Fund (TF 401) in the Parks, Recreation and Marine Department (PR) by $45,000 for the 2018 Municipal Band Summer Concert Season, offset by sponsorship and private donations revenues.
The Parks, Recreation and Marine Department is requesting an appropriation increase in the amount of $15,906 in the Special Advertising and Promotion Fund and $45,000 in the Tidelands Operations Fund to pay for activities associated with the 2018 Municipal Band Summer Concert Season. These increases in appropriation are fully offset by revenues generated from sponsorship and private donations.
Police
18. Increase appropriations in the General Fund (GF) in the Police Department (PD) by $626,121 for the purchase of police vehicles, fully offset by reimbursement revenue from Los Angeles County Metropolitan Transportation Authority (LA Metro).
As part of the law enforcement services contract with LA Metro, the Police Department requires the purchase of ten new vehicles. An appropriation increase is requested to accommodate this expense, which will be reimbursed by LA Metro.
19. Increase appropriations in the General Fund (GF) in the Police Department (PD) by $737,175 for overtime expenses related to providing staffing at special events, offset by revenue from production companies and event promoters.
The Police Department provided supplemental law enforcement services for various special events throughout the year. In FY 18, additional events were staffed than what was budgeted; therefore, an appropriation increase of $737,175 is needed for the unbudgeted staffing costs, offset by reimbursement revenue received from production companies and event promoters.
20. Increase appropriations in the General Grants Fund (SR 120) in the Police Department (PD) by $543,104, to make a technical correction offset by grant revenues.
The Port Security Grant Program (PSGP) 2014 grant funds were previously approved by the City Council on December 2, 2014, and the grant performance period has ended. This is a technical correction to reinstate the appropriation that was inadvertently removed during carryover cleanup. This is a federal grant from Federal Emergency Management Agency (FEMA) that PD gets on an annual basis that is directed towards Port operations.
21. Increase appropriations in the General Fund (GF) in the Police Department (PD) by $88,000 for the increase in Civic Center security, offset by revenue received via MOU with the Public Works Department (PW).
The Police Department provided increased Civic Center security due to operational needs. The revenue has already been received in PD and this appropriation increase will better align the budget to actuals.
Public Works
22. Increase appropriations in the Capital Projects Fund (CP) in the Public Works Department (PW) by $83,206 for street improvements at Colorado Street between Roswell Avenue and Ximeno Avenue, offset by a transfer from the Energy Resources Department (ER).
Due to a gas pipeline replacement project, street improvements on Colorado Street between Roswell and Ximeno Avenues, including pavement removal, replacement and street rehabilitation, are necessary. This project will be partially funded by a transfer from the Gas Fund (EF 301) in the Energy Resources Department (ER) in the amount of $83,206 to cover the cost related to the pipeline replacement. This project is planned to be programmed for a future fiscal year and will be requested as part of a future annual budget process.
23. Increase appropriations in the Capital Projects Fund (CP) in the Public Works Department (PW) by $112,075 for upgrades of the HVAC system at the Technology and Innovation Department’s transmitter facility, offset by a transfer from the Technology and Innovation Department (TI).
Increase appropriations in the General Services Fund (IS 385) in the Technology and Innovation Department (TI) by $112,075 for a transfer to the Public Works Department (PW), offset by funds available.
The Technology and Innovation Department’s transmitter facility, located in the City of Signal Hill, requires an HVAC system upgrade. The estimated cost of $112,075 is to replace and relocate two compressor units and replace two air handling units. The project costs will be funded by a transfer from the General Services Fund (IS 385) in the Technology and Innovation Department (TI).
24. Increase appropriations in the Capital Projects Fund (CP) in the Public Works Department (PW) by $1,000,000 for citywide wayfinding signage, offset by a transfer from the City Manager Department (CM).
The implementation of citywide signage and wayfinding, per the adopted Signage Master Plan, will include gateway locations, monuments, directional wayfinding, pedestrian wayfinding, and coastal access wayfinding. As part of the FY 18 Adopted Budget, $1,000,000 in one-time funds were approved for wayfinding signage in the Special Advertising and Promotions Fund (SR 133) in the City Manager Department (CM). These funds will be transferred to the Public Works Department for the implementation of the wayfinding and signage project.
25. Increase appropriations in the Capital Projects Fund (CP) in the Public Works Department (PW) by $25,430 for transit and mobility projects, offset by revenue from the Transportation Development Act.
The Transportation Development Act (TDA) of 1971 provides funding for transit and mobility projects that comply with regional transportation plans. TDA funds are allocated through the City’s annual CIP budget process and may be used for the activities related to the planning and construction of bicycle and pedestrian facilities. An appropriation increase of $25,430 is requested to account for the additional revenue received since the proposed budget submittal.
26. Increase appropriations in the Capital Projects Fund (CP) in the Public Works Department (PW) by $180,000 to provide concrete improvements to the east/west alley south of Anaheim Street between Walnut and Rose Avenues, offset by a transfer from the Development Services Department (DV).
Improvements to alleyways identified in the Place-Based Neighborhood Improvement Strategy Areas in accordance with the City’s Five-Year Plan (2018-2022) submitted to HUD have been co-designed with community stakeholders and residents. The intention is to activate underutilized or blighted public spaces. Community Development Block Grant (CDBG) funding in the amount of $180,000 will be provided by the Development Services Department (DV) to provide concrete improvements to the east/west alley south of Anaheim Street between Walnut Avenue and Rose Avenue. The appropriation increase is offset by a transfer from the Community Development Grants Fund (SR 150) in the Development Services Department (DV).
27. Increase appropriations in the Capital Projects Fund (CP) in the Public Works Department (PW) by $120,000 for Major/Secondary Highway Program, offset by revenue from penalties paid for exceeding weight restrictions on Santa Fe Avenue.
The Office of the City Prosecutor received $120,000 as payment of penalties for intermodal carriers exceeding weight restrictions along Santa Fe Avenue in Long Beach. The Public Works Department has determined the most appropriate use for funds received is in the Major/Secondary Highway Program, specifically for improvements to Santa Fe Avenue between Willow Street and 27th Street.
28. Increase appropriations in the Gas Tax Street Improvement Fund (SR 181) in the Public Works Department (PW) by $5,500,000 for the Shoemaker Bridge Replacement Project, offset by grant revenue.
In 2012, the Los Angeles County Metropolitan Transportation Authority (LA Metro) approved programming of $5,500,000 of Measure R Early Action Program funds for the Shoemaker Bridge Replacement Project (Project). On April 26, 2018, LA Metro’s Board of Directors approved an additional $5,500,000 for a total revised award of $11,000,000. The Project is currently in the early design phase. Staff anticipates the design phase will be completed in approximately two years with construction complete prior to the 2028 Olympics.
29. Increase appropriations in the Capital Projects Fund (CP) in the Public Works Department (PW) by $32,000 for the Residential Street Program, offset by a transfer from the Refuse/Recycling Fund (EF 330) in the Public Works Department (PW).
Additional appropriations are requested for the Residential Street Program in the Capital Projects Fund (CP) due to an update to the Nexus study linking the amount of miles City refuse trucks drive on City streets to the number of potholes created by the refuse trucks. The Refuse Fund provides funding to offset these additional street maintenance costs. The appropriation increase is offset by a transfer from the Refuse/Recycling Fund (EF 330).
30. Increase appropriations in the General Fund (GF) in the Public Works Department (PW) by $275,000 for the City Place Parking Garage operations, offset by additional parking revenues.
Over the years, the operational expenses for City parking lots and spaces have increased due to the annual CPI increase for the parking management contractor, equipment and software upgrades, higher than anticipated credit card fee revenue, and added maintenance service agreements. An appropriation increase of $275,000 is requested for the unbudgeted costs related to City Place Parking Garage. The increase is fully offset by higher than anticipated parking revenues at City Place.
31. Increase appropriations in the Civic Center Fund (IS 380) in the Public Works Department (PW) by $191,340, offset by a transfer from the Employee Benefits Fund (IS 391).
Increase appropriations in the Employee Benefits Fund (IS 391) in the Citywide Activities Department (XC) by $191,340 for a transfer to the Civic Center Fund, offset by funds available.
On October 9, 2018, the City Council approved an appropriation adjustment in the amount of $1,138,783, for design changes in the new Civic Center related to ergonomic height-adjustable workstations for employees, offset by funds from the Employee Benefits Fund. It has since been determined that the appropriation requested omitted sales tax on the workstations and the workstations needed for the Library Service Department. This budget adjustment is a technical correction to provide sufficient appropriation to cover the $191,340 in sales tax and additional workstations. The total costs for the ergonomic workstations with this additional appropriation is $1,330,123. These additional costs for the adjustable workstations will be offset by funds available in the Employee Benefits Fund for these employee health-related costs.
32. Increase appropriations in the Queen Mary Fund (TF 410) in the Public Works Department (PW) by $175,044 for reimbursement to Urban Commons for approved capital improvements to the Queen Mary, offset by Carnival Cruise Line passenger fee revenue, Queen Mary ground rent, and Catalina Express pass-through rent.
In November 2016, the City Council approved a 66-year lease agreement with Urban Commons for the operation, management, and preservation of the Queen Mary. All rental revenues generated under the agreement accumulate in the Historic Preservation Capital Improvement Plan (HPCIP) Fund. The additional amount will allow the City to reimburse the lessee for approved HPCIP projects. The request to increase appropriations in the amount of $175,044 in the Queen Mary Fund (TF 410) is offset by rental streams generated under the Queen Mary lease agreement.
Citywide Activities
33. Increase appropriations in the Community Development Grant (SR 150) in the Economic Development Department (ED) by $200,000 for oversight of the cannabis Equity Hire Program, offset by a transfer from the General Fund (GF).
Decrease appropriation in the General Grants Fund (SR 120) in the Economic Development Department (ED) by $200,000.
On October 9, 2018, the City Council approved an appropriation adjustment for the one-time startup cost of $266,000 to implement the cannabis social equity program (Equity Program). The Economic Development Department was given $200,000 for the oversight of the cannabis Equity Hire Program. This is a technical correction to provide appropriation in the correct fund where project expenses will be recorded.
34. Increase appropriations in the Insurance Fund (IS 390) in the Citywide Activities Department (XC) by $2,600,000, to fund City settlements of prior lawsuits, offset by funds available.
On April 3, 2018, the City Council authorized the City Attorney to pay the full settlement of the lawsuit entitled Marcello Oscar Bedetti v. City of Long Beach, et al.
35. Decrease appropriations in the General Fund (GF) in the Citywide Activities Department (XC) by $2,000 of the 8th Council District one-time infrastructure funds to be transferred to the Legislative Department (LD).
On September 18, 2018, the City Council approved the use of $10,000 in one-time Eighth Council District Priority funds for use to support community events and concerts. This appropriation decrease is a technical correction to reflect the transfer made to the Eight Council District from: $8,000 already transferred from Council District Priority Funds budgeted in the Capital Projects Fund in the Public Works Department, and $2,000 to be transferred from the General Fund in the Citywide Activities Department. The Council District Priority funds that are unallocated are currently budgeted in both the Capital Projects Fund in the Public Works Department and the General Fund in the Citywide Activities Department due to preparing the system and these funds for transition to the new financial systems (LB COAST).
SUGGESTED ACTION
Approve recommendation.
BODY
[Enter Body Here]
Respectfully Submitted,
JOHN GROSS
DIRECTOR OF FINANCIAL MANAGEMENT
APPROVED:
PATRICK H. WEST
CITY MANAGER