TITLE
Recommendation to approve the Fiscal Year 2021 third departmental and fund budget appropriation adjustments in accordance with existing City Council policy. (Citywide)
DISCUSSION
On September 8, 2020, the City Council adopted the Appropriations Ordinance governing the City’s Adopted Budget for Fiscal Year 2021 (FY 21). Periodically, changes in revenue or operating conditions require mid-year appropriation adjustments. For example, in certain cases, these adjustments enable departments to expend recently awarded grant revenue for which there is no existing appropriation. In addition, changes for multi-year grants/projects are necessary to bring appropriations in line with final grant/project award amounts. Other instances involve a contractual obligation or a City Council-initiated project or general operations that require appropriation adjustments to be made. In accordance with the City’s practice, these adjustments are presented periodically throughout the year to the City Council for consideration. On March 9, 2021, the City Council approved the first departmental and fund budget appropriations adjustments. On April 20, 2021, the City Council approved the second departmental and fund budget appropriations adjustments. This is the third departmental and fund budget appropriation adjustments request for FY 21. The detailed descriptions of the proposed adjustments are provided below, and Attachment A provides a summary of all proposed adjustments by fund.
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 Gary J. Anderson on November 9, 2021.
TIMING CONSIDERATIONS
The following requests for adjustments to FY 21 departmental and fund appropriations are necessary to reflect changes in operating conditions. City Council action is requested on December 7, 2021, to enable the timely processing of budget adjustments.
FISCAL IMPACT
City Manager
1. Increase appropriations in the General Fund Group in the City Manager Department by $6,000, offset by a transfer from the Citywide Activities Department of $3,000 from Second Council District and $3,000 from Seventh Council District One-time District Priority Funds for Child Care service agreement during City Council meetings; and
Decrease appropriations in the General Fund Group in the Citywide Activities Department by $6,000 for a transfer to the City Manager Department.
In FY 20, the Second Council District (CD2) and Seventh Council District (CD7) each agreed to fund childcare services during City Council meetings. The program financials are managed by the City Manager Department and program activities are coordinated and managed by the City Clerk’s Office. To support this program, CD2 and CD7 each earmarked $3,000 from their One-time District Priority Funds. The appropriation increase request in the City Manager’s Office was inadvertently left out in FY 20. This is a technical correction in FY 21 to appropriate the funds in the General Fund Group in the City Manager for these services.
2. Increase appropriations in the General Fund Group in the City Manager Department by $27,600 for compensation to members of Charter Commissions and City Council appointed committee members, offset by drawing down on funds available or operating reserves.
The City Manager Department is requesting an appropriation increase of $27,600 to fund approved compensation increases for members of both Charter Commissions and City Council-appointed Committee members. On January 7, 2020, the City Council approved amending the FY 20 Salary Resolution to revise the salary range for the Members of Boards and Commissions eligible for compensation. The Resolution amending the Salary Resolution was not formally adopted by the City Council until June 9, 2020. Since the Resolution was retroactive to January 1, 2020, a lump-sum payment was made retroactively in FY 21 to all eligible Members of Boards and Commissions for meetings attended in FY 20. Since then, stipends and fringe benefits have been paid for on a regular basis. This request aligns the budget in the General Fund Group with actual expenditures during FY 21.
3. Increase appropriations in the General Fund Group in the City Manager Department by $27,457 for Intergovernmental Affairs membership dues, offset by drawing down on funds available or operating reserves.
The City Manager Department is requesting an appropriation increase of $27,457 to align the budget with actual membership costs to various regional associations such as the Southern California Association of Governments, League of California Cities, National League of Cities, and the Independent Cities Association. Membership dues to these organizations have increased incrementally since 2015, but the budgeted amount has remained static over this time. Making this correction on an ongoing basis will be reviewed as part of the FY 23 base budget process.
4. Increase appropriations in the General Fund Group in the City Manager Department by $42,156 for labor and materials expenditures from the 2021-22 Management Assistant Program, offset by drawing down on funds available or operating reserves.
The 2020-2021 Management Assistant Program, which would have run from July 2020 through June 2021, was cancelled as part of budget reductions, and budget for the program in FY 21 was reduced to zero as a result. However, recovery funds have allowed the City to proceed with the 2021-2022 program, which will run from July 2021 through June 2022. As a result, expenditures associated with the program have incurred in the last quarter of FY 21 (July through September), requiring a budget adjustment for actual expenditures. The City Manager Department is requesting an appropriation increase of $42,156, offset by funds available or operating reserves, to fund the portion of the 2021-22 program that occurred in FY 21.
5. Increase appropriations in the General Fund Group in the City Manager Department by $101,000 to support Cannabis Social Equity Program activities, offset by funds transferred from the Health and Human Services Department.
On July 10, 2018, the City Council approved a Cannabis Social Equity Program (Equity Program). The goal of the Equity Program is to support equal opportunity in the cannabis industry. Staff identified one-time startup costs to implement the Equity Program. Out of the one-time startup costs, $16,000 was provided to the Office of Equity in the Health and Human Services Department to coordinate Fresh Start Clinics for individuals eligible for criminal expungements under Proposition 64 and an additional $85,000 was provided to the Office of Equity to assist with the oversight of cannabis business Community Reinvestment Plans. The Office of Equity was then moved from the Health and Human Services Department to the City Manager Department in FY 21. This transfer will move the budget and actuals to the department managing the activities.
City Prosecutor
6. Decrease appropriations in the General Grants Fund Group in the City Prosecutor Department by $2,794, as a technical correction, for FY 20 approved Employee Memoranda of Understanding (MOUs).
On January 19, 2021, the City Council approved the FY 20 third departmental and fund budget appropriation adjustments which included increases for various MOUs approved during FY 20. Included in those adjustments was an appropriations increase of $2,794 in the General Grants Fund Group in the City Prosecutor Department. A technical correction to reduce the appropriation is necessary as the original appropriation for this cost already existed in the General Grants Fund Group through a grant award.
Development Services
7. Increase appropriations in the Successor Agency Debt Service Fund Group in the Development Services Department by $26,785,441, for issuance of the Successor Agency’s Tax Allocation Refunding Bonds, Series 2021 (2021 bonds), offset by funding from the refinanced bonds; and,
Increase appropriations in the Successor Agency Debt Service Fund Group in the Development Services Department by $1,176,833 for a technical correction associated with the Successor Agency’s annual debt service payments, offset by funds from the Successor Agency Fund Group (Redevelopment Property Tax Trust Fund).
On February 11, 2021, the Long Beach Successor Agency refinanced its 2010 Series A, Recovery Zone Economic Development Bonds (2010A bonds), and 2010 Series B, Build America Bonds (2010B bonds), through the issuance of its Tax Allocation Refunding Bonds, Series 2021 (2021 bonds). Total present value savings from the refunding is $9 million. Refunding will result in an increase of the “residual” property tax distribution to all affected taxing entities, including the City. The requested $26,785,441 appropriation adjustment will accommodate the bond refinancing. Additionally, the Development Services Department is requesting a technical correction of $1,176,833 associated with the Successor Agency’s annual debt service payments. This appropriation adjustment will ensure there is sufficient funding to cover the Successor Agency’s FY 21 debt service payments.
Disaster Preparedness and Emergency Communications
8. Increase appropriations in the General Grants Fund Group in the Fire Department by $42,991, offset by additional UASI funding and reallocations of Homeland Security grant funding;
Decrease appropriations in the General Grants Fund Group in Disaster Preparedness and Emergency Communications Department by $25,212 to partially offset other departments' grant expenditures;
Decrease appropriations in the General Grants Fund Group in the Health and Human Services Department by $463 to partially offset other departments' grant expenditures; and
Decrease appropriations in the General Grants Fund Group in the Police Department by $33,964 to partially offset other departments' grant expenditures.
On June 11, 2019, the City Council approved the City's Federal 2018 Urban Area Security Initiative (UASI 2018) grant award for $1,214,846. The City has been awarded an additional $10,000 in UASI 2018 funding. The requested adjustment will align appropriations to actual grant funded expenditures totaling $1,224,846. In addition, a reallocation of funds due to cost savings in grant-eligible programs and equipment is being requested to support expenditures made by participating departments within the grant performance period of May 31, 2021. The Fire Department is utilizing these additional funds to purchase Regional Training Center equipment and the Harbor Department is utilizing funds to purchase Floor Warden Radios. Appropriation adjustments are requested for the Disaster Preparedness and Emergency Communications, Fire, Health and Human Services, and Police Departments to offset eligible expenditures within the grant performance period. A reallocation of $26,648 will go to the Harbor Department, however, an appropriation adjustment is not necessary for the Harbor Department's portion of the UASI grant change.
9. Increase appropriations in the General Grants Fund Group in the Disaster Preparedness and Emergency Communications Department by $59,777, offset by additional SHSP funding and reallocations of Homeland Security grant funding;
Decrease appropriations in the General Grants Fund Group in the Fire Department by $29,751 to partially offset other departments' grant expenditures;
Decrease appropriations in the General Grants Fund Group in the Health and Human Services Department by $4,827 to partially offset other departments' grant expenditures; and
Decrease appropriations in the General Grants Fund Group in the Parks, Recreation and Marine Department by $9,584 to partially offset other departments' grant expenditures.
On June 9, 2020, the City Council approved a grant from the 2018 State Homeland Security Program (SHSP 18) for a reimbursement grant award of $736,005 to enhance the City's response capabilities. The City has been awarded an additional $15,615 in SHSP 18 funding. The requested adjustment will align appropriations to actual grant funded expenditures totaling $751,620. In addition, a reallocation of funds due to cost savings in grant-eligible programs and equipment is being requested to support expenditures made by participating departments within the grant performance period ending May 31, 2021. These additional funds authorize the Disaster Preparedness and Emergency Communications Department to purchase VESTA Workstations for the 911 Backup Call Center. Appropriation adjustments are requested for the Fire, Health and Human Services, Parks, Recreation and Marine Departments to offset these eligible expenditures within the grant performance period.
10. Increase appropriations in the General Grants Fund Group in the Disaster Preparedness and Emergency Communications Department by $5,507 for a County of Los Angeles grant, offset by grant revenue.
On July 20, 2021, the City Council approved a grant with the County of Los Angeles to receive and expend Department of Homeland Security grant funding for the Emergency Management Grant Program Coronavirus 2019 Disease Supplemental Program in the amount of $30,527. Subsequently, the grant award has been increased by $5,507 to a new total of $36,034. The requested adjustment will align budget to actual grant funded expenditures totaling $36,034.
Economic Development
11. Increase appropriations in the Business Assistance Fund Group in the Economic Development Department by $2,683,992, for emergency loans to small businesses and non-profit organizations offset by grant revenue.
In July 2020, the Economic Development Department was awarded $2,683,992 from the U.S. Department of Commerce Economic Development Administration (EDA) from the Revolving Loan Fund Supplemental Disaster Recovery and Resilience Awards. This non-competitive grant was made available under the Coronavirus Aid, Relief, and Economic Security (CARES) Act to respond to the coronavirus pandemic. Specifically, the award established a Revolving Loan Fund (RLF) to provide emergency loans to Long Beach small businesses and non-profit organizations impacted by the COVID-19 pandemic. These funds have helped to sustain the City's successful Emergency Microloan Program which provides $10,000 to micro-businesses with less than five employees; and, to provide larger loans to businesses that have been unable to secure funding from private banks or other government loan programs. The EDA will fund 100 percent of total allowable costs up to the award amount. The grant agreement was executed on August 24, 2020, under Resolution No. RES-20-001 and requires an appropriation increase in the amount of $2,683,992 in the Business Assistance Fund Group, offset by grant reimbursement revenue.
Fire
12. Increase appropriations in the General Fund Group in the Fire Department by $3,728,815 for overtime expenses related to staffing assistance for California wild land fires, offset by reimbursement revenue to be received from the State of California in FY 22.
The Fire Department provided staffing assistance for California wildland fire events during FY 21. As the overtime expenses for the employees who provided support for fighting these wildland fires is unbudgeted, an appropriation increase is necessary. This increase will be offset by reimbursement revenue from the State of California. The reimbursements are expected to be received during FY 22.
13. Increase appropriations in the General Fund Group in the Fire Department by $660,379 for Ground Emergency Medical Transportation Quality Assurance Fee payments to the State of California, drawing down on funds available or operating reserves.
In accordance with Senate Bill 523, the State Department of Health Care Services (DHCS) established the Ground Emergency Medical Transportation (GEMT) Quality Assurance Fee (QAF) Program to provide supplemental Medi-Cal payments to GEMT providers, increasing the amount of reimbursement for ambulance transportation of individuals covered by Medi-Cal beginning in FY 19. DHCS calculates the annual GEMT QAF rate imposed on each emergency medical transport provided by the Fire Department. Since these payments to the State are unbudgeted, an appropriation increase is necessary.
14. Increase appropriations in the Tidelands Operating Fund Group in the Fire Department by $160,390 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 21, enrollment increased significantly, from approximately 500 to nearly 800, resulting in an increase in staffing and related costs. These costs were offset by increased Junior Lifeguard Program revenue of $111,300. Additionally, The Fire Department has a partnership with Long Beach Unified School (LBUSD) to improve access and success in the Junior Lifeguard Program, resulting in additional revenue of $49,090. 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.
15. Increase appropriations in the Tidelands Operating Fund Group in the Fire Department by $366,822, for parts and repair services for one rescue boat, offset by a release of reserves set aside for this purpose at FY 20 year-end.
On August 4, 2020, the City Council approved a contract with South Coast Shipyard, Inc. for parts and repair services for Fire Rescue Unit #129 in an amount up to $550,586. During FY 20, a progress payment of $183,764 was made and the balance of $366,882 was reserved at year end for the purpose of funding the remaining repairs during FY 21. An appropriation increase is needed, offset by a release of funds that were set aside for this purpose at the end of FY 20.
Health Department
16. Decrease appropriations in the General Fund Group in the Health and Human Services Department by $14,768,725, as a technical correction.
On January 19, 2021 the City Council approved a contract award to Volunteers of America Los Angeles (VOALA) for providing homeless prevention and rapid rehousing services using funding from the Department of Housing and Urban Development (HUD) 2020 Federal Emergency Solutions (ESG) Grant. As lead agency to administer homeless services grants across the Long Beach Continuum of Care (COC), the Health and Human Services Department was given by the City Council an increase in appropriation in the amount of $14,768,725 to administer the program. However, expenses incurred from the program are being transferred to the Development Services Department on a quarterly basis where appropriation currently exist from prior City Council actions approving and increasing appropriations in the Community Development Grants Group in the Development Services Department for the grant award. This is a technical correction to decrease appropriations to align with expenditures being transferred to the Development Services Department.
17. Increase appropriations in the Housing Authority Fund Group in the Health and Human Services Department by $16,227,180 for housing assistance payments, offset by the Department of Housing and Urban Development (HUD) grant revenues.
In FY 21, the Housing Choice Voucher Program is experiencing higher expenses due to increases in assistance payments and voucher use. Payment standards have changed and have increased the maximum monthly assistance payments provided to participants in the voucher program. This has led to more voucher adjustments necessary to provide additional assistance. The increase in appropriations of $4,500,000, offset by HUD grant funding, will be used to support FY 21 Housing Assistance Payment (HAP) and other operating expenditures.
On July 1, 2021, the Department of Housing and Urban Development (HUD) allocated new Emergency Housing Vouchers (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 sheltering those who have housing uncertainties. On August 10, 2021, the Housing Authority Commission approved acceptance of the funds, and request for appropriation increase in the Housing Authority Fund Group is now being requested.
Human Resources
18. Increase appropriations in the Insurance Fund Group in the Human Resources Department by $4,527,333 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 several years. The market for these types of insurance for public agencies has been tightening 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 $4,527,333 to cover the additional premium costs. A budget adjustment is needed to align budget with actuals, offset by FY 21 funds available. In FY 22, the higher premium costs will be collected as revenues recouped from charges to user departments.
Library Services
19. Increase appropriations in the General Grants Fund Group in the Library Services Department for materials purchases and programming support by $754,544, offset by revenue from the Long Beach Public Library Foundation.
The Library Services Department has received funds totaling $754,544 from the Long Beach Public Library Foundation for materials purchases and programming support. The contributions are follows: $7,292 for the Gutenberg endowment; $1,692 for the Burcham endowment; $3,741 for the Slaybaugh endowment; $70,000 for the Apostle Youth Fund; $47,401 for the Literacy Development Fund; $410,000 for the Jet Blue Fund; $1,250 for the Rotary Books Fund; $146,250 for the Munzer Fund; $12,141 for Leeme Un Libro, and $54,777 for the Family Learning Centers.
Parks, Recreation and Marine
20. Increase appropriations in the Capital Projects Fund Group in the Parks, Recreation, and Marine Department by $9,135 for materials, offset by rebate revenue.
The Parks, Recreation and Marine Department’s Maintenance Operations Bureau (MOB) has installed Calsense irrigation controller upgrades throughout City Parks based on the contract approved by the City Council on April 16, 2019. As part of this project, MOB participated in a rebate program and received additional revenue rebates in the amount of $9,135 from the Metropolitan Water District of Southern California’s SoCal WaterSmart program.
21. Increase appropriations in the General Grants Fund Group in the Parks, Recreation, and Marine Department by $62,078 for the Summer Food Program, offset by additional Coronavirus Aid Relief, and Economic Security Act revenues received.
The Parks, Recreation and Marine Department received additional funding in the amount of $62,078 from the California Department of Education for the Summer Food 2020 Program. The additional funding was made possible by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and was received by the City after FY 20 closed. The Summer Food Program is a multi-year grant making it allowable to utilize the additional funding in the current or future fiscal years.
22. Receive and file update that the previously approved contingent appropriations increase in the Capital Projects Fund Group in the Public Works Department by $3,919,689 and in the Parks, Recreation, and Marine Department by $623,699 for various projects and grant administration will not be processed for FY 21, due to non-execution of final grant agreements with the Los Angeles County Regional Park and Open Space District.
On January 19, 2021, the City Council approved a contingent appropriation increase of $4,543,388 in the Capital Projects Fund Group in the Public Works and Parks, Recreation and Marine Departments for various projects and grant administration, contingent upon executed grant agreements between the City and the Los Angeles County Regional Parks and Open Space District (RPOSD) for County Measure A funding. Grant agreements have not yet been executed and this item is to receive and file the update that these contingent appropriations will not be increased by FY 21 year-end close (including the related technical appropriations by the same amount in each fund and department which are needed to allow for a transfer of County Measure A funds within the Capital Grants Fund, a fund within the Capital Projects Fund Group). There will be no change to fund and departmental appropriations as a result of this item. It is anticipated that grant agreements with RPOSD will be executed in FY 22. Following executed grant agreements between the City and RPOSD, the department will return to the City Council with a request for appropriation, offset by County Measure A funding.
Police
23. Increase appropriations in the General Fund Group in the Police Department by $4,575,000, for Long Beach Safety Recovery Plan crime reduction and community engagement activities, offset by one-time General Fund monies made available by federal relief funds.
In early 2021, the City Council requested that the Police Department assemble a strategy for addressing increased levels of violent crime. In response, the Police Department developed and implemented data-driven initiatives, which have helped address crime levels, as evidenced by the flattening of the spike in violent crime experienced earlier in the year, while strengthening relationships within the community. On July 20, 2021, the City Council authorized the allocation of $4,575,000 for the Long Beach Safety Recovery Plan to support continued crime reduction and community engagement activities, offset by one-time General Fund monies made available by federal relief funds. The funds will support overtime for a variety of initiatives including backfilling staff to continue the Coordinated Response Team (CRT), overtime to maintain existing beats and base staffing levels, various community engagement activities and pilot funding to participate in the Georgetown Law School’s acclaimed Active Bystandership for Law Enforcement (ABLE) project. A table below summaries the fund allocations by program area.
Public Works
24. Increase appropriations in the General Fund Group in the Public Works Department by $1,000 for mural restoration, offset by the Eighth Council District One-time District Priority Funds transferred from the Citywide Activities Department for a mural restoration; and,
Decrease appropriations in the General Fund Group in the Citywide Activities Department by $1,000 to offset a transfer to the Public Works Department.
Council District Eight requested Public Works to manage the restoration of the mural located on the Frontier Building on Market Street and Atlantic Avenue. This mural was originally commissioned by the Long Beach Redevelopment Agency but has since fallen into disrepair. The mural was restored at a cost of $2,000 to Public Works. Public Works has agreed to split the cost with Council District Eight’s Office. This item should normally be part of the citywide Approved Project List letters that periodically go to the City Council for the use of One-time District Priority Funds that support current City projects and programs; however, due to timing in the fiscal year, this item is included in this report to ensure the correct appropriation for FY 21.
25. Increase appropriations in the General Fund Group in the Public Works Department by $1,050,000 for permit inspection costs, offset by permit inspection revenues.
Due to the high volume of construction permits issued, operational expenses have also increased to verify that permit requirements are being met. Operationally, the Department utilized consultants to augment staff shortages and address both current and backlogged permits resulting in an unbudgeted cost. Of this unbudgeted amount, Public Works is requesting an appropriation increase in the amount of $1,050,000 in the General Fund Group to cover the unbudgeted citywide permit inspection costs, offset by the increased permit revenue generated by the inspections.
26. Increase appropriations in the Capital Projects Fund Group in the Public Works Department by $90,000 for capital improvements related to the sewer drain repairs at the Multi-Service Center, offset by a transfer from the General Fund Group in the Health and Human Services Department; and,
Increase appropriations in the General Fund Group in the Health and Human Services Department by $90,000 to transfer to the Capital Projects Fund Group, offset by drawing down on funds available or operating reserves.
As part of the FY 21 second departmental and fund budget adjustment letter approved by the City Council on April 20, 2021, the Public Works Department increased appropriations by $126,000, to fix the sewer drains that were causing water to back up in the men’s showers at the Multi Service Center. This increase in the Capital Projects Fund Group was offset by a transfer of $56,000 from the General Fund Group and $70,000 from the Health Fund Group in the Health and Human Services Department. Additional funding is necessary because the original scope of work has changed and includes design engineered construction drawings, which substantially increased plumbing, framing, and general conditions costs. This appropriation increase of $90,000 will cover the construction costs and will be offset by a transfer from the General Fund Group in the Health and Human Services Department.
27. Increase appropriations in the Capital Projects Fund Group in the Public Works Department by $350,000 for capital improvements related to the generator upgrade at the Main Health Department, offset by a transfer from the Health Fund Group in the Health and Human Services Department.
The Main Health Building (Building) currently does not have emergency backup power. The existing generator is old, outdated, and not functioning properly. The upgrade to the new generator and automatic transfer switches will provide backup electrical power to the Building. This will allow the Building to continue to function and provide required services during a power outage. The total project cost to replace the generator is estimated to be $560,000 funded by $210,000 from Measure A and the requested transfer of $350,000 from the Health Fund Group. This appropriation increase of $350,000 will be offset by a transfer from the Health Fund Group in the Health and Human Services Department.
28. Increase appropriations in the Capital Projects Fund Group in the Public Works Department by $600,000 for capital improvements related to the generator upgrade at the Fire Department Headquarters, offset by a transfer of Urban Area Security Initiative (UASI) 2020 grant funding from the General Grants Fund Group in the Police Department.
This Fire Department Headquarters (HQ) generator is a joint initiative between the Fire and Police Departments, intended to provide a generator to support the emergency operations that deploy out of the Fire HQ/Police Field Support Division offices. The existing generator is old, outdated, and unable to handle the load requirements of the building. The new generator and automatic transfer switches will provide backup emergency power to the building. This will allow the facility to continue to function and provide required services during a power outage and support the emergency operations. This appropriation increase of $600,000 in the Capital Projects Fund Group in the Public Works Department will be offset by reimbursable UASI grants funding to be transferred from the General Grants Fund Group in the Police Department. The total project cost is estimated to be $903,300 which is supported by the requested transfer and by $303,300 of general capital funds currently budgeted in the Capital Project Fund Group in the Public Works Department.
29. Increase appropriations in the Civic Center Fund Group in the Public Works Department by $1,384,433 for the Public Safety Parking Structure, offset by a $584,433 transfer of one-time operational savings in the Police Department’s General Fund Group and a reallocation of $800,000 from various completed projects in the Capital Projects Fund Group in the Public Works Department.
On December 11, 2018, the City Council approved plans and specifications for design-build services for a Public Safety Parking Structure. The total approved budget at that time for this project was $13,300,000, including financing and bonding costs. The total cost of the build alone was $13,300,000 and several enhancements were added to the original project scope necessary to allow full public safety operations within and adjacent to the structure. An appropriations increase in the amount of $1,384,433 is requested in Civic Center Fund Group in the Public Works Department to cover the gap in the project funding. This request will be offset by a transfer of $800,000 from various completed projects with excess appropriation in the Capital Projects Fund Group in the Public Works Department. Additionally, the Police Department, whose employees primarily benefit from the structure, will provide a one-time transfer of $584,433 from a combination of facility maintenance budget and one-time department operating savings in the General Fund Group to close the remaining funding gap.
30. Increase appropriation in the Tidelands Area Fund Group in the Public Works Department by $500,000 as a technical correction for the Queen Mary engineering design contract with Moffatt & Nichol, Inc., offset by a transfer from the Tidelands Operating Fund Group in the Public Works Department.
On June 8, 2021, the City Council authorized staff to execute a contract with Moffatt & Nichol, Inc., one of the City’s on-call engineering firms for design services to assist the City in making short-term repairs to immediately improve safety and stability of the Queen Mary. As part of the approved request, $500,000 was authorized to provide as needed engineering design services for critical repair work. The design work will be funded by the Tidelands Operating Fund Group, but the expenditure for the work will need to be recorded in the Tidelands Area Fund Group where the Queen Mary asset is managed. An appropriations increase of $500,000 in the Tidelands Area Fund Group in the Public Works Department is requested as a technical correction to properly budget the design cost, offset by a transfer from the Tidelands Operating Fund Group in the Public Works Department.
31. Increase appropriations in the Capital Projects Fund Group in the Public Works Department by $500,000 for the Improvements of Cherry Avenue, offset by funds received from the Boeing Company.
On May 4, 2010, the City Council approved the Amended and Restated Development Agreement by and between The City of Long Beach and The Boeing Company for the construction and development of the Douglas Park complex. Per the agreement, the Boeing Company will contribute to the City’s infrastructure improvements needs through payments to the City in a total amount of $2,000,000 and payable at agreed times and amounts described in Section 8.46 of the agreement. As agreed, a payment of $500,000 was received on August 13, 2020 and deposited in the Capital Projects Fund Group in the Public Works Department. The funds will be used to slurry seal the existing pavement on Cherry Avenue, from Wardlow Road to Bixby Road. The project is currently in the design phase and will be in construction by Winter of 2022. The scope of work will include a complete slurry seal of the existing pavement and the re-installation of all roadway striping and legends in new paint. The project will make the road more comfortable to drive on, the roadway will have an improved level of safety, and the service life of the roadway surface will be extended. The total cost of the project is currently unknown.
32. Increase appropriations in the Capital Projects Fund Group (Capital Projects Grant Fund) in the Public Works Department by $200,000, to make a transfer to the Capital Projects Fund offset by reimbursable grant funding from the California Energy Commission; and,
Increase appropriations in the Capital Projects Fund Group (Capital Projects Fund) in the Public Works Department by $200,000 for the Clean Transportation Program offset by transfer of California Energy Commission funds from the Capital Grant Fund.
On June 15, 2021, the City Council approved an agreement with the California Energy Commission (CEC) to receive and expend grant funding in an amount up to $200,000 for the Clean Transportation Program. The CEC recently awarded the City of Long Beach (City) a Clean Transportation Program grant. The Department of Public Works will receive up to $200,000 to develop a blueprint for medium- and heavy-duty (MD/HD) zero-emission vehicle (ZEV) Infrastructure. The major goal of the blueprint is to identify actions and milestones needed for implementation of MD/HD ZEVs and the related infrastructure. This grant advances CEC and the City's shared goal of promoting sustainable development in transportation to improve public health and reduce vehicle and greenhouse gas emissions. An appropriations increase in the amount of $400,000 is requested in the Capital Projects Fund Group in the Public Works Department. Of this amount, $200,000 will be offset with grant funding from the California Energy Commission. The remaining $200,000 is a technical appropriation adjustment to allow for the transfer of grant funding from the Capital Projects Grant Fund to the Capital Projects Fund - both of which are funds within the Capital Projects Fund Group.
33. Increase appropriations in the Capital Projects Fund Group in the Public Works Department by $100,000 for Community Development Block Grant eligible sidewalk repair projects, offset by transfer from the Community Development Fund Group in the Development Services Department.
The Department of Development Services will be transferring $100,000 of Community Development Block Grant (CDBG) funds to Public Works for CDBG eligible sidewalk repair projects. Public Works utilized $100,000 of General Capital funds to complete the Development Services Long Beach Boulevard decorative crosswalk project. An agreement between the Departments provides that Development Services would transfer an equivalent amount of CDBG funds to Public Works to complete the sidewalk repair projects. This transfer will be offset by grant revenue budgeted in Development Services Community Development Fund Group.
34. Increase appropriations in the Capital Projects Fund Group in the Public Works Department by $275,000 for Long Beach Boulevard Decorative Crosswalk Project, offset by transfer from the Community Development Fund Group in the Development Services Department.
The Department of Public Works is managing and administering the Long Beach Boulevard Decorative Crosswalk Project. The Department of Development Services will be transferring $275,000 of Community Development Block Grant (CDBG) funds to Public Works to cover the cost of the project. This transfer will be offset by grant revenue budgeted in Development Services Community Development Fund Group.
35. Increase appropriations in the Capital Projects Fund Group in the Public Works Department by $140,000, offset by rebates and incentives received from Southern California Edison (SCE) ChargeReady program.
On December 4, 2018, the City Council approved participation in the SCE ChargeReady program and awarded a contract to ChargePoint, of Campbell, CA, to install and maintain electric vehicle (EV) charging stations. In addition to the SCE rebates and incentives available to assist with funding of purchase, installation, and maintenance of EV charging stations, the California Electric Vehicle Incentive Project (CALeVIP), of Sacramento, CA, offers incentives for EV charger installations. At the time, total project costs net of SCE rebates and incentives were estimated at $4.4 million. The City Council approved $3.3 million in appropriation, where revenue to offset project costs were available and $977,780 in project costs remained unfunded. The Public Works Department indicated that it would return to request the remaining appropriation once additional funding was identified. The requested appropriation increase of $140,000, offset by rebates and incentives revenue received from SCE's ChargeReady program and CALeVIP, has funded a portion of the $977,780 in unbudgeted project costs. The Department has gathered previously approved funding in the amount of $369,689, combined with the present request of $140,000 for a total of $509,689. The remaining unfunded balance of $468,091 has been met with AB32 funds currently appropriated in the Capital Projects Fund Group in the Public Works Department.
36. Increase appropriations in the Civic Center Fund Group in the Public Works Department by $392,180 for operating expenses related to after-hours security services for City Hall, offset by revenue to be collected in FY 22 through the Citywide Civic Center MOU from various City departments and funds.
Additional security services were requested to provide after hour guard services for City Hall’s security desk from 6:00 pm - 7:00 am Monday - Friday, and all-day Saturday and Sunday. The additional services totaling $392,180 was not anticipated during the FY 21 budget development and will be recouped in the FY 22 Citywide Civic Center MOU from various City departments and funds.
37. Increase appropriations in the General Fund Group in the Public Works Department by $1,573,392 for the operating cost related to the Street Light Maintenance program, offset by reducing appropriation in the Citywide Activities Department.
Decrease appropriations in the General Fund Group in the Citywide Activities Department by $1,573,392 as realized savings and move the appropriation to the Public Works Department.
As part of the Adopted FY 21 Budget, City Council approved the transfer of the Street Light Maintenance program performed by City Light and Power (CLP) to City staff. The implementation was planned not to take effect until about seven months into FY 21, and this planned implementation delay resulted in over half a year of operating costs with CLP related to the program in a total amount of $1,573,392. This cost for CLP was inadvertently not included in the Adopted FY 21 Budget. An appropriations increase is requested in the Public Works Department to correct the budget to cover these costs, offset by a transfer of appropriation due to savings realized in the Citywide Activities Department.
Technology and Innovation Department
38. Increase appropriations in the General Services Fund Group in the Technology and Innovation Department by $541,000, as a technical correction for the implementation of Motorola public safety radio equipment, offset by Measure A funds available.
On September 11, 2018, the City Council approved a contract with Motorola Solutions, Inc., for the installation of public safety radio communications equipment. As part of the council letter recommendation, an appropriation increase in the General Services Fund Group of $541,000 was approved, offset by a transfer of Measure A revenues. This amount was unused in FY 18 and inadvertently was not carried over to future years when this appropriation will be needed for expenses associated with the implementation of the Motorola public safety radio equipment. In FY 21, $187,398 has been incurred and it is anticipated that these funds will be fully expended by the end of FY 22. An appropriation increase in the General Services Fund Group is requested to add back the appropriation as a technical correction.
Association of Long Beach Employees (ALBE) One-time Payments
39. Increase appropriations by $269,510 in the relevant departments and funds as shown on Attachment B to implement the ALBE Memorandum of Understanding (MOU) one-time payments, offset by available fund balance.
On March 20, 2020, the City Council approved the ALBE MOU which included a one-time payment to each permanent full-time employee of $1,500. With savings needing to be achieved due to the pandemic, ALBE agreed to forego these one-time payments and each employee be furloughed for 48 hours. Subsequently due to the early termination of citywide furloughs, each full-time employee received a $750 one-time payment. These one-time payments were not incorporated into the Adopted FY 21 budgets of the affected departments and funds. Appropriation increases are requested to correctly align budgets for these one-time costs, which have been paid to employees during FY 21. Attachment B lists the requested department and fund appropriation increases. The total requested net appropriation increase for all funds is $269,510 of which $100,425 is in the General Fund Group. The appropriation increases are funded by available fund balance for each affected fund. The Harbor and Water Departments’ increased costs total $124,336. As both departments have sufficient appropriation for these increases, they are not included in the appropriations request.
Citywide Activities
40. Increase appropriations in the Employee Benefits Fund Group in the Citywide Activities Department by $94,691,466 for the lump sum prepayment to CalPERS, offset by available funds available.
In July 2021, the City paid CalPERS a lump sum of $94.7 million to prepay the required portion of the employer’s Unfunded Accrued Liability for pensions. This prepayment will save the City $3.3 million in all funds of which $1.8 million is savings to the General Fund. The City made similar prepayments in FY 18, FY 19 and FY 20. However, for FY 21, a prepayment was not anticipated to be made due to concerns in the Spring of 2020 about the overall impact on cash exacerbated by the COVID-19 pandemic and resulting recession. The cashflow for the Employee Benefits Fund Group has now been updated and shows that it is feasible to prepay for FY 22 (with the payment made in July 2021). Since the budget for the prepayment was not included in the Adopted FY 21 budget, an appropriation increase is necessary. The FY 22 budget for the City’s CalPERS costs already factors in the savings as a result of the pre-payment.
41. Increase appropriations in the Tidelands Operating Fund Group in the Citywide Activities Department by $6,390,816 for the operating transfer to the Aquarium Fund, offset by funds available within the Tidelands Operating Fund Group.
The Long Beach Bond Finance Authority on March 1, 2012 issued refunding of Lease Revenue Bonds that originally acquired and constructed the Aquarium of the Pacific. To provide for the repayment of the Bonds and the annual debt service, the Aquarium of the Pacific Corporation (Corporation) makes rental payments to the Trustee to be used to pay debt service on the Bonds. The City remits parking revenues generated from the Facility and uses the Tidelands Operating Fund to help pay debt service on the Bonds. The debt service on the Bonds is the responsibility of the City and backed by the Tidelands Operating Fund. In FY 21, the total annual debt service is $8,125,600. This amount will be funded from rental payments and parking revenues, as well as a $4,997,863 transfer from the Tidelands Operating Fund to the Aquarium Fund (both are funds within the Tidelands Operating Fund Group).
On May 9, 2017, the City Council approved a loan to the Aquarium of the Pacific Corporation of up to $10.5 million from the Tidelands Fund to provide funding for the construction of the Pacific Visions Project. The loan was expected to be funded by a Tidelands bond issue, intended to be repaid from donations and grants. In 2017, the City issued Tidelands Revenue Bonds, Series 2017A for the construction related to the expansion of the Aquarium of the Pacific. However, because of the pandemic and the State and City’s health orders in March 2020, the Aquarium of the Pacific suspended public visitation to the Aquarium, resulting in a severe decline in revenues. Consequently, the Aquarium of the Pacific proposed an action to alleviate the Corporation from the payment of the debt service obligation of the agreement. This action requires the City to make the repayment of the bonds and fund the remaining 2017A debt service. The remaining total annual debt service is approximately $1,400,000. The Series 2017 Bonds are secured by Tidelands revenues, including oil revenues and the transfer from the Harbor Revenue Fund. To service both Aquarium debt issues, transfers are made within the Tidelands Operating Fund Group. Tidelands Operating Fund will transfer funds annually to the Aquarium Fund to pay the debt service on the 2017 Bonds within the Tidelands Operating Fund Group. In FY 21, the annual transfer payment is $1,392,953. The appropriation increase is to align with actuals to reflect transfers within the Tidelands Operating Fund Group.
42. Increase appropriations in the Tidelands Operating Fund Group in the Citywide Activities Department by $5,700,000 for the operating transfer to the Tidelands Oil Revenue Fund Group, offset by funds available in the Tidelands Operating Fund Group.
In FY 20, Tidelands Oil Revenue Fund (TORF) set-aside $5,700,000 in Tidelands Operating Fund Group toward funding eventual oil field closure. In FY 21, the set-aside was released from funds available and transferred to TORF. This appropriation increase is to align with actuals to reflect the transfer out to TORF.
43. Increase appropriations in the Tidelands Operating Fund Group in the Citywide Activities Department by $190,570 for an operating transfer to the Rainbow Harbor Fund for debt service and to align budget with actual expenditures, offset by funds available within the Tidelands Operating Fund Group.
On July 19, 2016, the 2006 Lease Revenue Bonds were refunded as part of the 2016B Series Rainbow Harbor Refinancing Project. Lease Revenue bonds were issued for construction of Rainbow Harbor and Queensway Bay parking facility. The 1,471-space parking structure at 200 Shoreline Drive is adjacent to the Aquarium of the Pacific. Annual debt service, principal and interest are funded by the Tidelands Operating Fund but recorded in the Rainbow Harbor Fund (both are part of the Tidelands Operating Fund Group). Annual transfers from the Tidelands Operating Fund to the Rainbow Harbor Fund are in accordance with the debt amortization schedule and this appropriation request is to align the budget with the actual expenditures.
44. Increase appropriations in the Tidelands Operating Fund Group in the Citywide Activities Department by $3,136,920 to transfer to the Queen Mary Fund in the Tidelands Area Fund Group for debt service and operating expenses in the Economic Development Department, offset by funds available in the Tidelands Operating Fund Group; and,
Increase appropriations in the Tidelands Area Fund Group in the Economic Development Department by $1,486,111 for operating and legal costs related to the Queen Mary, offset by a transfer from the Tidelands Operating Fund Group in the Citywide Activities Department.
On June 4, 2021, the City Manager received notification from Urban Commons Queensway, LLC (Debtor), that it would surrender its interests in the Amended and Restated Lease and Operations Agreement of Queen Mary, Adjacent Lands and Improvements, Dome and Queen's Marketplace (Contract No. 34432), between the City of Long Beach and Debtor, and responsibility for operating the Queen Mary Hotel and surrounding properties would be returned to the City effective June 4, 2021. In FY 21, $1,650,808 for Queen Mary debt service on the 2017B bonds and cash deficit, $300,000 of anticipated legal fees, and $1,186,111 for the management operations contract for Evolution Hospitality, will be funded by the Tidelands Operating Fund in the Tidelands Operating Fund Group. Tidelands Operating Fund Group will transfer a total of $3,136,920 to the Tidelands Area Fund Group in the Economic Development Department where expenses are incurred. The Economic Development Department will need an appropriation increase for the legal and management operations costs in the Tidelands Area Fund Group, offset by the transfer from the Tidelands Operating Fund Group.
45. Increase appropriations in the Special Advertising and Promotion Fund in the Citywide Activities Department by $2,500 as a technical correction for the Third District One-time District Priority Funds, offset by funds available.
On March 10, 2020, the City Council approved an increase in appropriation in the amount of $5,700 in the Special Advertising and Promotion Fund Group in the City Manager Department to support the 6th Annual Spring Into Summer Community Concert. This was to be offset by $3,200 of the Third Council District One-time Priority Funds in the Citywide Activities Department and by $2,500 in sponsorships. When this item was processed, the total amount of $5,700 was reduced in Third Council District One-time Priority Funds in the Citywide Activities Department. This item is a technical correction to restore the $2,500 which was incorrectly reduced in the Citywide Activities Department.
46. Increase appropriations in the General Fund Group in the Citywide Activities Department by $22,000 as a technical correction for the Fourth District One-time District Priority Funds.
On July 6, 2021, the City Council increased appropriations in the amount of $22,000 in the General Services Fund Group in the Technology and Innovation Department to provide funding for the Zaferia Video System repairs. The approved letter also erroneously decreased appropriation by $22,000 in the General Fund Group in the Citywide Activities Department. These funds are needed to offset the operating transfer to the General Services Fund Group. This is a technical correction to restore the $22,000 budgeted in the General Fund Group in the Citywide Activities Department.
47. Increase appropriations in the General Fund Group in the Citywide Activities Department by $979,665 for the operating transfer to the Gas Fund Group offset by drawing down on funds available or operating reserves.
In FY 20, the Gas Fund Group transferred $13,535,736 based on anticipated year-end revenue performance. However, the calculated transfer amount based on final audited FY 20 year-end revenue came in less at $12,556,071. In FY 21, the General Fund Group remitted the overage of $979,665 to the Gas Fund Group to ensure that the total transfer amount is within the City Charter-authorized level of 12 percent of annual gross revenues.
48. Increase appropriations in the Special Advertising and Promotion Fund Group in the Citywide Activities Department by $2,261 as a technical correction for the Third Council District One-time District Priority Funds, offset by funds transferred from the City Manager Department; and,
Decrease appropriation in the Special Advertising and Promotion Fund Group in the City Manager Department by $2,261 to offset a transfer to the Citywide Activities department to support the technical correction.
On September 14, 2021, the City Council approved an increase in appropriations in the amount of $2,261 in the Special Advertising and Promotion Fund Group in the City Manager Department to support a Long Beach Parks community concert held on October 3, 2021. This was offset by a reduction of appropriations in the amount of $2,261 of Third Council District One-time District Priority Funds from the Special Advertising and Promotion Fund Group in the Citywide Activities Department. This Council item was also included on the October 5, 2021 City Council agenda, Item 15, as part of the Fiscal Year 2021 designation of one-time District Priority Funds for City Council District infrastructure projects and existing programs. A technical correction to reduce the appropriation increase is necessary as the original appropriation for this cost already exists in the Special Advertising and Promotion Fund Group, as approved by the City Council on October 5, 2021.
49. Increase appropriations in the Debt Service Fund Group in the Citywide Activities Department by $3,645,205 to align budget to actuals incurred for the construction of the Public Safety Parking Structure, 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 the Lease Revenue Bonds to pay for the Public Safety Parking Structure construction project. The lease bond proceeds were deposited into the Debt Service Fund Group in the Citywide Activities Department. As project costs incur in the Civic Center Fund Group, they are transferred to the Debt Service Fund Group where the revenue to offset those expenses is held. This appropriation increase will align actuals to the budget in Citywide Activities Department.
CARES Funding
As part of the FY 21 second departmental and fund budget appropriation adjustment approved on April 20, 2021, $6 million of FY-20 Coronavirus Aid, Relief and Economic Security (CARES) set aside was approved to reappropriate in the General Fund Group in the Citywide Activities department for the use in FY 21 for COVID-19 administrative related costs. The appropriations requested below reflect items brought to the City Council in FY 21 Council letters for the use of the CARES funding from the $6 million balance. A budget adjustment is needed to move appropriation from the Citywide Department to Financial Management and the Disaster Preparedness and Emergency Communications Department. The remaining balance of the $6 million will be determined at year-end depending on departmental pandemic related costs and will be brought back to Council as part of the FY 21 Year End Performance Report.
50. Increase appropriations in the General Fund Group in the Financial Management Department by $100,000 for temporary staff and materials to support the COVID-19 Relief Payment Plan Program, offset by CARES Act funding carried over into FY 21; and.
Decrease appropriations in the General Fund Group in the Citywide Activities Department by $100,000, to offset a transfer to the Financial Management.
On March 9, 2021, the City Council approved a motion to establish a citywide COVID-19 Relief Payment Plan Program to allow individuals and businesses to make interest-free and penalty-free payments over time for parking citations and most business-related and general fees, including health and fire fees incurred during the pandemic. For those that enroll in the COVID-19 Relief Payment Plan Program and comply with its terms and conditions, late fees and penalties will continue to be waived and substantial time will be allowed to complete the payments. The COVID-19 Relief Payment Plan Program is administered centrally through the Department with the addition of temporary staff. The annual cost to administer the new COVID-19 Relief Payment Plan Program is estimated at $100,000 and includes temporary staffing and materials.
51. Increase appropriations in the General Fund Group in the Financial Management Department by $200,000 to support the implementation cost of the City’s new procurement software, offset by $200,000 of CARES Act funding carried over into FY 21.
Decrease appropriations in the General Fund Group in the Citywide Activities Department by $200,000, to offset a transfer to the Financial Management.
On August 3, 2021, the City Council approved a contract with Periscope Holdings, Inc (Persicope), to purchase a procurement software solution. The Purchasing Division of the Financial Management Department will implement Periscope ePro (ePro) as a replacement for the Planet Bids system. The one-time implementation cost of the software was approved in the amount of $605,138. An appropriations increase of $200,000 is requested to support implementation cost, offset by $200,000 in CARES Act funding. The remaining cost of $405,138 will be funded by $100,000 in Long Beach Recovery Act funding to be appropriated as part of the overall recovery plan, a $50,000 direct payment from the Water Fund Group in the Water Department and by $255,138 within current resources available from FY 21 savings in the General Fund Group in the Financial Management Department.
52. Increase appropriations in the General Fund Group in the Disaster Preparedness and Emergency Communications Department by $174,000 for additional utilities, supplies, and materials expenditures incurred during several Emergency Operations Center (EOC) Activations experienced throughout FY 21, offset by CARES Act funding carried over into FY 21.
Decrease appropriations in the General Fund Group in the Citywide Activities Department by $174,000, to offset a transfer to the Disaster Preparedness and Emergency Communications Department.
The Disaster Preparedness and Emergency Communications Department has hosted an unprecedented amount of unplanned and unforeseen EOC Activations throughout FY 21 which have contributed to unbudgeted costs. EOC Activations are considered a citywide emergency preparedness and response effort. These expenditures are the cost of doing business before, during and after an emergency and ensures that the City is addressing the emergency from all levels of the organization - public safety, public health, legal, etc. EOC activations initiate a 24/7 use of the EOC facility by Fire, Police, and several other City Departments depending on the scope, scale and size of the event. EOC Activations immediately require an increased use of electricity to assist with the powering of the EOC Situation Room and EOC Break-Out-Rooms, along with their respective office equipment: computer desktops, laptops, lights, SmartBoard TVs and phones. An EOC Activation requires enhanced use of office supplies, custodial supplies, and custodial services to support the 24/7 operations of a fully activated EOC and the health and safety of the City employees responding to the emergency. EOC Activations that occurred during FY 21 include: COVID-19 Pandemic continued, 2020 Elections (Potential Civil Unrest), 2021 Inauguration (Potential Civil Unrest), and the President Biden/Governor Newsom Visit to Long Beach. The Department is requesting an appropriation increase to fund these mandatory unbudgeted costs incurred for EOC Activations that are not eligible for FEMA reimbursements.
Capital Projects Budgeting Munis Technical Cleanups
On April 15, 2019, the City went live with Phase 1 of the Munis Financials system. The implementation included approximately 100,000 converted lines of the FY 19 Adopted and Adjusted Budget, utilizing the newly developed Chart of Accounts, and over 2,800 lines of Projects and Grants budget from the converted Project Ledger data. By design during implementation, the Capital Projects budget amounts from the prior financial system were transferred into a unique account in the Munis Project Ledger and were appropriated in new individual Munis funds within the Capital Projects Fund Group. As part of a new budgeting methodology in the Munis Project Ledger, Capital Projects expenditures are recorded in the Capital Projects Fund while funding sources such as Gas Tax, County Proposition C, County Measure R, Transportation Improvement Fees, and other sources are purposely recorded in a different fund within the Capital Projects Fund Group. This creates a need to double budget projects from particular funding sources in the Munis Project Ledger. This adjustment is needed to properly budget projects in the correct fund according to the new Munis Project Ledger and accounting system. No new budget is being added to any projects or programs at this time. It is likely additional adjustments will be needed in future budget adjustment letters to complete the double budgeting methodology for Capital Projects in the Project Ledger to allow for proper accounting and budgeting. Those items will be brought to the City Council at a future date.
53. Increase appropriations in the Capital Projects Fund Group in the Public Works Department by $35,310,257 as a technical budget adjustment to allow for the Project Ledger double budgeting process in the Munis financials system; and,
Increase appropriations in the Capital Projects Fund Group in the Parks, Recreation, and Marine Department by $40,320 as a technical budget adjustment to allow for the Project Ledger double budgeting process in the Munis financials system.
Long Beach COAST- Second Allocation and Technical Alignment
54. Increase appropriations in the Uplands Oil Fund Group in the Energy Services Department by $37,146 for a transfer to the General Services Fund Group in the Technology and Innovation Department for the LB COAST project.
On March 9, 2020, the Financial Management Department released a memo to departments outlining an additional cost allocation to reflect the increased costs for the LB COAST project. The cost allocation methodology for this second allocation was the same as the methodology used for the original project cost allocation and is based on the indirect cost allocation plan used for accounting operations and on revenue generated by each City fund. The schedule for providing the requested funds was discussed with each fund manager, with payments being made in either FY 20 or FY 21. The requested appropriation increase is needed to make the payment to the LB COAST project as communicated in the March 2020 memo and does not add new budget to the project.
55. Increase expense appropriations in General Services Fund Group in the Technology and Innovation Department by $2,546,692, for implementation of the LB COAST project, offset by funds available.
LB COAST is the City’s Enterprise Resource Planning (ERP) project, the largest technology project the City has ever done and a top City Council priority. This multi-year project replaces almost all City financial, payroll and human resources systems that serve every City department including Harbor and Water Departments. Since FY 14, the City Council has appropriated approximately $32.5 million from multiple City funds to fund the ERP system implementation. On March 9, 2020, the Financial Management Department released a memo to departments outlining an additional cost allocation to reflect the increased costs for the LB COAST project. An appropriations increase of $2,546,692 is needed to align with revenues already received from various departments.
Long Beach Recovery Act
56. Increase appropriations by $1,087,500 in the General Fund Group with various increases and decreases across several departments as shown in the table below to implement revised program allocations of the Long Beach Recovery Act, offset by the Federal American Rescue Plan Act funds; and approve the revised program allocations of the Long Beach Recovery Act as seen in Attachment C.
|
Department |
Appropriation Increase / (Decrease) |
|
City Manager |
350,000 |
|
Development Services |
4,810,000 |
|
Economic Development |
(215,000) |
|
Financial Management |
(100,000) |
|
Health and Human Services |
(5,054,167) |
|
Library Services |
95,000 |
|
Parks, Recreation and Marine |
1,301,667 |
|
Public Works |
(100,000) |
|
Net Adjustments to General Fund Group |
$1,087,500 |
The Long Beach Recovery Act was initially approved by the City Council on March 16, 2021 and a revised plan was approved on August 24, 2021. The total of the Long Beach Recovery Act has grown from $249.3 million to $252 million since the latest revised plan. The increase is due to identified revised funding amounts of existing grants, an additional round of funding under the Vaccination Grant, and a technical correction to the federal American Rescue Plan Act (ARPA) direct funding amount. The table below provides detail on the updates to the funding sources.
|
Long Beach Recovery Act Funding Sources (in millions) |
|
|
Previous Amount |
Updated Amount |
Difference |
|
American Rescue Plan Act (ARPA) |
$135.7 |
$135.8 |
$0.1 |
|
Airport Grant |
$15.1 |
$15.1 |
$0.0 |
|
Emergency Rental Assistance Program (ERAP) - Round 1 |
$30.2 |
$30.2 |
$0.0 |
|
Emergency Rental Assistance Program - Round 2 |
$21.2 |
$21.2 |
$0.0 |
|
Epidemiology and Laboratory Capacity Grant (ELC) |
$26.7 |
$26.7 |
$0.0 |
|
Health Disparities Grant |
$7.7 |
$7.7 |
$0.0 |
|
HUD Home-ARP (Homelessness) |
$10.0 |
$10.2 |
$0.2 |
|
Vaccination Grant |
$2.7 |
$5.1 |
$2.4 |
|
Total Funding Sources |
$249.3 |
$252.0 |
$2.7 |
The Long Beach Recovery Act programs fall under three categories: Economic Recovery, Healthy and Safe Community, and Securing our City’s Future. The Economic Recovery programs decreased by $350,000 to offset program reallocations and funding source changes by program. The Healthy and Safe Community programs increased by $4.1 million due to increases in grant funding and reallocation of funding sources by program. The Securing Our City’s Future programs decreased by $991,922 to offset the $425,000 violence prevention programs that were listed as part of the Long Beach Safety Recovery Plan approved by the City Council on July 20, 2021 with a commitment to not cut the Housing Support programs related to fund source adjustments and technical corrections. The following table summarizes the changes by Program Category.
|
Long Beach Recovery Act Program Categories (in millions) |
|
|
Previous Amount |
Updated Amount |
Difference |
|
Economic Recovery |
$64.0 |
$63.7 |
($0.3) |
|
Healthy and Safe Community |
$108.6 |
$112.6 |
$4.0 |
|
Securing Our City’s Future |
$76.7 |
$75.7 |
($1.0) |
|
Total Long Beach Recovery Act |
$249.3 |
$252.0 |
$2.7 |
The Long Beach Recovery Act programs continue to evolve as additional funding sources and recovery needs are identified. Program allocations were impacted by a reduction in federal funding, securing additional grants and/or changes in program design to meet City Council approval provided in March 2021. Attachment C details the revised Long Beach Recovery Act programs, sub-programs, and the associated allocation amounts. Staff will report back to City Council periodically as additional funding sources and programs are identified.
SUGGESTED ACTION
Approve recommendation.
BODY
[Enter Body Here]
Respectfully Submitted,
KEVIN RIPER
DIRECTOR OF FINANCIAL MANAGEMENT
APPROVED:
THOMAS B. MODICA
CITY MANAGER