TITLE
Recommendation to approve the Fiscal Year 2012 third quarter departmental and fund budget appropriation adjustments in accordance with existing City Council policy. (Citywide)
DISCUSSION
On September 6, 2011, the City Council adopted the Appropriations Ordinance governing the City's Adopted Budget for Fiscal Year 2012 (FY 12). Periodically, changes in revenue or operating conditions require appropriation adjustments. For example, in certain cases these adjustments enable departments to expend recently awarded grant revenue for which there is no existing appropriation. In addition, changes for multi-year grants/projects are necessary to bring appropriations in line with final grant/project award amounts. In accordance with the City's practice, these adjustments are presented quarterly to the City Council for consideration. Please see Attachment A for a Summary of Proposed Adjustments of impacted City funds and Attachment B for a recap of FY 12 General Fund Expenditure Budget Adjustments.
This matter was reviewed by Assistant City Attorney Charles Parkin on August 28, 2012.
TIMING CONSIDERATIONS
The following requests for adjustments to FY 12 departmental and fund appropriations are necessary to reflect changes in operating conditions. City Council action is requested on September 11, 2012 to enable the timely processing of payments.
FISCAL IMPACT
Development Services
In accordance with AB1x 26 (the Dissolution Act), redevelopment agencies across the state of California were dissolved effective February 1, 2012. Pursuant to the Dissolution Act, sponsoring cities that agreed to become a Successor Agency and accept the assets and liabilities, and wind down the operations of the former redevelopment agencies were required to create a new fund to account for the transactions of the Successor Agency through completion of the wind down process.
As of March 2012, the former Long Beach Redevelopment Agency's (Agency) cash was transferred to the Successor Agency. A budget adjustment is requested to establish the appropriations in the Successor Agency Operations Fund (SA 270) for single-year transactions, including $170,406 for Financial Management staff and $379,925 associated with Citywide indirect costs previously budgeted in the Agency's funds, between the period of February 1 and September 30, 2012, and project-related (multi-year) transactions for the period of February 1, 2012 through project completion. Projects typically span multiple fiscal years. The budget appropriation amounts for the multi-year projects originated in part from the Enforceable Obligation Payment Schedule (EOPS) of the Agency, which identifies the estimated expenditures required to complete blight removal projects in progress by the Agency at the time of its dissolution. Please see Attachment C for a list of multi-year projects.
In addition, this request establishes the expense appropriations for the Successor Agency's Tax Allocation Bond payments in the Successor Agency Debt Service Fund (SA 277) for the period of February 1, 2012 through September 30, 2012.
Effectively, appropriations previously budgeted in the former Agency's funds will be transferred to the Successor Agency. A summary of the appropriation request is as follows:
· Increase appropriations in the Successor Agency Operations Fund (SA 270) in the Development Services Department (DV) by $231,136,108.
· Increase appropriations in the Successor Agency Operations Fund (SA 270) in the Financial Management Department (FM) by $170,406.
· Increase appropriations in the Successor Agency Operations Fund (SA 270) in Citywide Activities Department (XC) by $379,925.
· Increase appropriations in the Successor Agency Debt Service Fund (SA 277) in the Development Services Department (DV) by $21,251,044.
Fire Department
City Council previously authorized the City Manager to receive and expend Department of Homeland Security grant funds for the 2008 and 2009 Urban Area Security Initiative (UASI) Grants totaling $8,445,836. Adjustments to departments' current allocations are necessary to align each department's share of the modified (UASI 08 & 09) and increased (UASI 09) grant allocations. As these changes are not budgeted, appropriation changes are necessary and will be offset by grant revenue.
No appropriation is necessary for Harbor Department's portion of the UASI grant change ($583), which is reallocated to the Police Department.
· Decrease appropriations in the General Grants Fund (SR 120) in the Fire Department (FD) by $100 from grant reallocation.
· Decrease appropriations in the General Grants Fund (SR 120) in the Health and Human Services Department (HE) by $7,387 from grant reallocation.
· Increase appropriations in the General Grants Fund (SR 120) in the Police Department (PD) by $9,123 from grant reallocation.
Health Department
The Housing Authority provides rental housing assistance to residents of Long Beach.
The Housing Authority is projecting to assist an additional 3,900 households over the course of FY 12 than originally projected. This increase, plus an increase in the monthly housing assistance payments (HAP), will result in an increase in rental payment expenses. The Housing Authority Bureau requests an appropriation increase for FY 12 in the amount of $6,182,737 to cover the additional costs for housing assistance payments incurred in the Housing Authority Fund (SR 151). The appropriation increase is fully offset by the increase in Housing and Urban Development (HUD) grant funding and the Housing Authority Fund's reserves for housing assistance payments.
· Increase appropriations in the Housing Authority Fund (SR 151) in the Health and Human Services Department (HE) by $6,182,737 from HUD grant funding and reserves.
The Certified Unified Program Agency (CUPA) Fund is used for managing hazardous waste in the City. In FY 12, personnel and contractual costs are exceeding the current budget. These costs are a result of unexpected additional hazardous waste clean up.
Sufficient revenue has been received to offset the expenditures.
· Increase appropriations in the Certified Unified Program Agency (CUPA) Fund (SR 131) in the Health and Human Services Department (HE) by $89,237 from additional revenue collection.
Library Services
The Long Beach Public Library has received funds in the total amount of $551,511, which include revenue from Jet Blue payments in lieu of fines totaling $549,000 and $2,511 from Bay Shore Library parking meters. The revenues from Jet Blue are designated for purchase of library materials. Revenues from the parking meters are designated for enhanced operations and maintenance for the Bay Shore Library. A budget adjustment is requested and is fully offset by a corresponding increase in revenue in the General Grants Fund and the General Fund.
· Increase appropriations in the General Grants Fund (SR 120) in the Library Services Department (LS) by $549,000 from donation revenue.
· Increase appropriations in the General Fund (GP) in the Library Services Department (LS) by $2,511 from parking meter revenue.
Police Department
On October 4, 2011, the City Council authorized the use of Uplands Oil Fund monies to invest in essential needs such as public safety. Specifically, a portion of the funds were allocated to restore police overtime to address immediate public safety demands, including the pending release of State prisoners into Long Beach and Los Angeles County. The requested budget adjustment shifts the funds to the Police Department for use.
· Increase appropriations in the General Fund (GP) in the Police Department (PO) by $2,200,000.
· Decrease appropriations in the General Fund (GP) in the Citywide Activities Department (XC) by $2,200,000.
The Chief of Police has authorized the use of State Asset Forfeiture funds - Youth Intervention/Prevention to allocate a total of $15,000 for at-risk youth programs among the NAACP's Afro-Academic, Cultural, Technological and Scientific Olympics (ACTSO), Long Beach Bar Foundation's Short Stop Program, and Operation Jump Start Program. The requested appropriation increase will be fully offset by State Asset Forfeiture funds - Youth Intervention/Prevention.
· Increase appropriations in the General Fund (GP) in the Police Department (PO) by $15,000 from State Asset Forfeiture funds.
The Chief of Police has authorized the use of Prisoner Welfare trust funds to cover $75,772 in costs for prisoner welfare in the Police Department jail. The expenses include installation of a new jail camera system, installation of bulletproof transaction window in the booking section, and miscellaneous items required by state law for prisoner welfare including clothing, bedding and newspaper subscriptions. The requested appropriation increase will be fully offset by the Prisoner Welfare trust account.
· Increase appropriations in the General Fund (GP) in the Police Department (PO) by $75,772 from Prisoner Welfare trust account.
The Chief of Police has authorized the use of Proposition 69 DNA reimbursement funds for various projects and overtime for the Police Department. These include installation of security cameras, new carpeting for the booking section, overtime for the property detail for inventory and implementation of a new 10 card system. The requested increase in appropriation will be fully offset by the Proposition 69 DNA reserve account, which has no restriction on use.
· Increase appropriations in the General Fund (GP) in the Police Department (PO) by $95,725 from the Proposition 69 DNA reimbursement funds.
Parks, Recreation and Marine
The Department of Parks, Recreation and Marine (PR) requests an appropriation increase in the amount of $375,000 in the General Fund to pay for rent associated with the Skylinks golf course. Revenues generated from sponsorship of PR programs and advertising in PR publications will offset this expenditure. Moving forward, this item is budgeted starting in FY 13.
· Increase appropriations in the General Fund (GP) in the Parks, Recreation and Marine Department (PR) by $375,000 from increased revenue.
PR requests an appropriation increase in the amount of $120,000 in the Capital Projects Fund to pay for public outreach, design plans, and a final report to seek additional grant funding for the development of a passive park at the California Gardens site. PR has indicated that revenues collected from the Big League Dreams settlement agreement in the amount of $120,000 will offset this expenditure.
· Increase appropriations in the Capital Projects Fund (CP) in the Parks, Recreation and Marine Department (PR) by $120,000 from revenues collected from the Big League Dreams settlement agreement.
On February 14, 2006, the City Council created the Cingular Trust, which indicates that lease payments for cell equipment placed on the roof of the Long Beach Senior Center must be used within the greater Alamitos Beach Neighborhood area. PR requests an appropriation increase to fund the building lease at Miracle Park in the amount of $11,400. Revenues collected in the Cingular Trust will offset this expe nd itu re.
· Increase appropriations in the General Fund (GP) in the Parks, Recreation and Marine Department (PR) by $11,400 from the Cingular Trust.
The Douglas Park Community Facilities District (CFD) is responsible for the irrigation and maintenance of the property and street medians along Lakewood Boulevard from Spring Street to Carson Street. Based on an agreement between the City and Boeing, the unbudgeted expense for reclaimed irrigation water may be reimbursed from assessment funds designated for the maintenance of the CFD infrastructure improvements. The appropriation increase represents unbudgeted expense reported for FY 12, and will be offset by the revenue received from the CFD reimbursement.
· Increase appropriations in the General Fund (GP) in the Parks, Recreation and Marine Department (PR) by $61,146 from reimbursement from the CFD.
On October 11, 2011, PR financed five Scotsman trailers to be used by the Maintenance Operations Bureau as office space. This lease-purchase, financed over a five-year period, will save approximately $283,000 over the life of the agreement. Pursuant to recently established guidelines by the Governmental Accounting Standards Board (GASB) to standardize financial reporting, a technical adjustment to pay the debt service out of the correct fund is necessary. Therefore, a budget adjustment is necessary to transfer appropriation from the General Fund in PR to the Debt Service Fund in the Citywide Activities Department.
· Decrease appropriations in the General Fund (GP) in the Parks, Recreation and Marine Department (PR) by $58,400.
· Increase appropriations in the Debt Service Fund (OS) in the Parks, Recreation and Marine Department (PR) by $58,400.
· Increase appropriations in the General Fund (GP) in the Citywide Activities Department (XC) by $58,400.
Signal Hill Petroleum has sponsored Movies in the Park since 2005, providing Partners of Parks with $27,500 to provide for 30 movies at park sites. Partners of Parks retained a 10 percent operational fee, and the remaining amount of $24,750 in revenue was deposited in the General Fund in support of the program for staff and supplies.
· Increase appropriations in the General Fund (GP) in the Parks, Recreation and Marine Department (PR) by $24,750 from donation revenue.
An appropriation increase is requested in the amount of $135,000 in the Tidelands Operations Fund for activities directly associated with the 2012 Sea Festival. PR has indicated that revenues generated from sponsorship and private donations, in the amount of $135,000, will offset this increase.
· Increase appropriations in the Tidelands Operations Fund (TF 401) in the Parks, Recreation and Marine Department (PR) in the amount of $135,000 from donation revenue.
PR has two tennis centers, Billie Jean King (BJK) and EI Dorado Park (EDP). First Serve, Inc., has a permit for the operation and management of both centers. All revenue derived from tennis-related fees, set by the Parks and Recreation Commission, are deposited into the Tennis Trust Account (Trust). All expenditures from the Trust must be expended for the purchase, maintenance, operation or improvement of grounds, buildings, structures, equipment or facilities for public tennis. Due to extended use, the 15 courts at EDP required patching, resurfacing and repainting. An appropriation budget increase is requested to pay for the improvements and is fully offset by the Trust.
· Increase appropriations in the General Fund (GP) in the Parks, Recreation and Marine Department (PR) by $51,583 from the Tennis Trust Account.
Public Works
On July 5, 2011, the City Council approved a request to authorize the City Manager to execute contracts for the purchase, implementation, and ongoing support of a utility customer information system (CIS). The Refuse Fund portion of the expense for FY 12 is $1,266,437. Currently, funds are unbudgeted in the Refuse Fund for its share of FY 12 project costs. To accommodate this expense, an appropriation increase is requested.
· Increase appropriations in the Refuse/Recycling Fund (EF 330) in the Public Works Department (PW) by $1,266,437 from fund balance.
In FY 12, the Utility Call Center was moved from the Department of Financial Management to Long Beach Gas and Oil (LBGO). Previous to FY 12, Call Center charges were part of the Billings and Collections MOU in the Department of Financial Management. When LBGO took over the Call Center, there were no appropriations made for Call Center expenses in the Environmental Services Bureau. To correct this oversight, an appropriation increase is requested. The Environmental Services Bureau's FY 12 portion for this operation is $555,641.
· Increase appropriations in the Refuse/Recycling Fund (EF 330) in the Public Works Department (PW) by $555,641 from fund balance.
The Fleet Services Bureau purchases fuel for City vehicles and is being reimbursed through monthly billing from user departments based on actual usage. Due to the significant increase in motor fuels market price during the fiscal year, the budget for motor fuel expenditures will not be sufficient. To accommodate this increase, an appropriation increase is requested.
· Increase appropriations in the Fleet Services Fund (IS 386) in the Public Works Department (PW) by $750,000 from increased revenues.
Council District 9 is working with stakeholders in North Long Beach to potentially establish a Business Improvement District (BID). Four proposals were received in response to the Request for Proposals for a BID consultant. Based on qualifications and proposed fees, Civitas Advisors was awarded the contract for establishing a BID, which is anticipated to complete the process in 12 to 18 months. One-time Uplands Oil funds, in the amount of $50,000, appropriated for this activity were originally budgeted in the Development Services Department (DV), but the project was subsequently assumed by Public Works. This technical correction transfers the project budget from DV to the Public Works Department.
· Increase appropriations in the General Fund (GP) in the Public Works Department (PW) by $50,000.
· Decrease appropriations in the General Fund (GP) in the Development Services Department (DV) by $50,000.
On May 22, 2012, the City Council approved the Second Amendment to Contract No. 32403 with AIS Construction Company for dredging the Harborlight Marina and required demolition at Colorado Lagoon, increasing appropriations in the Public Works Department, rather than in the City Manager Department (CM), where all Tidelands Measure D projects are budgeted. This technical correction moves the budget into the appropriate department.
· Increase appropriations in the Tidelands Operations Fund (TF 401) in the City Manager Department (CM) by $600,000.
· Decrease appropriations in the Tidelands Operations Fund (TF 401) in the Public Works Department (PW) by $600,000.
On January 16, 2007, the City Council approved the submission of an Los Angeles County Metropolitan Transit Authority (LACMT A) Call for Projects application for traffic signal improvements on Ocean Boulevard. The LACMTA awarded $1,406,000 in local funds to the project. The project will provide traffic signal synchronization and safety enhancements along Ocean Boulevard from Alamitos Avenue to Livingston Drive/2nd Street.
· Increase appropriations in the Capital Projects Fund (CP 201) in the Public Works Department (PW) by $1,406,000 from increased revenue.
Citywide Activities
On February 21,2012, the City Council approved the issuance of the Aquarium of the Pacific 2012 Refunding Bonds to refinance the outstanding Aquarium of the Pacific 2001 Refunding Bonds in order to take advantage of current market interest rates. The 2012 Refunding Bonds were issued in April 2012 and the requested budget adjustment is necessary to increase budgeted expense related to this refinancing transaction.
· Increase appropriations in the Tidelands Operating Fund (TF 401) in the Citywide Activities Department (XC) by $112,861,126 from bond proceeds.
An appropriation increase of $78,678 is required for debt payments for an existing Department of Boating and Waterways (DBW) loan for the rebuild of portions of the Alamitos Bay Marina. The project is currently in Phase 2A. Due to the phased approach for the Marina rebuild, the FY 12 Adopted Budget was based on a preliminary estimate of the loan payments that would be made during FY 12. There are sufficient funds in the Marina Fund to support this request.
· Increase appropriations in the Marina Fund (TF 403) in the Citywide Activities Department (XC) by $78,678 from fund balance.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
JOHN GROSS
DIRECTOR OF FINANCIAL MANAGEMENT
APPROVED:
PATRICK H. WEST
CITY MANAGER