TITLE
Recommendation to approve the Fiscal Year 2008 third quarter departmental and fund budget appropriation adjustments in accordance with existing City Council policy. (Citywide)
DISCUSSION
On September 11, 2007, the City Council adopted the Appropriations Ordinance governing the City's Adopted Budget for Fiscal Year 2008 (FY 08). 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 Fund Balance Analysis of impacted City funds and Attachment B for a recap of FY 08 General Fund Budget Adjustments.
This letter was reviewed by Assistant City Attorney Heather A. Mahood on July 14, 2008.
TIMING CONSIDERATIONS
The following requests for adjustments to FY 08 departmental and fund appropriations are necessary to reflect changes in operating conditions. City Council action is requested on August 5, 2008 to enable the timely processing of payments.
FISCAL IMPACT
Community Development
On April 16, 2008, the Long Beach Housing Development Company Board of Directors approved a loan in an amount not to exceed $9,886,000 to Meta Housing Corporation to provide gap financing for the development of a 46-unit mixed-income rental project at 2355-2375 Long Beach Boulevard. An appropriation increase is requested to provide this financing. There is no impact to the General Fund.
· Increase appropriations in the Housing Development Fund (SR 135) in the Department of Community Development (CD) by $9,886,000.
The Redevelopment Agency Board has approved and/or authorized the Executive Director to:
· Enter into Purchase and Sales Agreements and all other related documents, in the amount of $4,546,500 to complete the purchase of properties on Atlantic Avenue located between 56th and 59th streets, and on Long Beach Boulevard within the Virginia Village historic core, which is a neighborhood-oriented retail commercial node. The properties on Atlantic Avenue have been identified in the North Long Beach Strategic Guide for Redevelopment for new development related to the creation of a strong Village Center in North Long Beach. The properties on Long Beach Boulevard will be used for public parking or commercial use.
· Approve a contract with Beverly Prior Architects, in the amount of $1,065,000, to determine the specifications and requirements for architectural design services for a new Fire Station 12 and a Disaster Resource building, located on Artesia Boulevard on a 1.2-acre parcel.
· Allocate funding in the amount not to exceed $450,000 for design and construction drawings for the public facilities at Scherer Park, and $150,000 for the conceptual design of public facilities in Houghton Park.
Revenues to be generated from tax increment and tax-exempt bond proceeds will offset appropriation increases requested above. There is no impact to the General Fund.
· Increase appropriations in the Redevelopment Fund (RD 230) in the Department of Community Development (CD) by $6,211,500.
Library
The Long Beach Public Library Foundation and the Friends of the Long Beach Public Library, both nonprofit organizations, have provided donations to the Library Services Department totaling $165,500 for the purchase of books and material resources. A budget adjustment is required to allow the Department to expend these funds. There will be no impact to the General Fund.
· Increase appropriations in the General Grants Fund (SR 120) in the Department of Library Services (LS) by $165,500.
Gas and Oil
On June 13, 2008, the average price of crude oil posted in the Midway Sunset and Huntington Beach fields by Chevron, Exxon Mobil, Shell and Union 76 was $122.23 per barrel. In May 2008, Wilmington oil prices have averaged $114.99 per barrel yielding a fiscal year-to-date average of $90.40 per barrel. The current budget is based upon an annual average of $85 per barrel.
This trend results in increases to expenditures, most notably the payment to the State, the transfer to the Tidelands Operating Fund (TOF) and transfer to the General Fund. The Department will use $110 per barrel as the basis for estimating the remaining revenue received in the fiscal year, with an annual average oil price of $96.94 per barrel. At this rate, the Tidelands Oil Revenue Fund (TORF) and the Upland Fund will need additional appropriations in the amount of $85,690,120 and $2,743,763, respectively. These increases in appropriations include the increase in the payments to the State by $80,293,231 as well as the increases in the transfer to TOF by $5,287,756 and the transfer to the General Fund by $3,569,764.
(in millions) |
TORF |
Upland Oil Fund |
Increase Payment to the State Increase Transfer to TOF Increase Transfer to General Fund Increase/Decrease in Unit Expenses Decrease in Misc Expenses |
$80.30 $5.29 - $0.11 - |
- - 3.57 (0.07) (0.76 |
Total |
$85.7 |
$2.7 |
· Increase appropriations in the Tidelands Oil Revenue Fund (NX 420) in the Department of Gas & Oil (OP) by $85,690,120.
· Increase appropriations in the Upland Oil Fund (SR 134) in the Department of Gas and Oil (OP) by $2,743,763.
Health
On February 12, 2008, the City Council added Chapter 5.81 to the City of Long Beach Municipal Code to create the Tobacco Retail Enforcement Program to discourage the sale of tobacco products to minors and protect the health and safety of children and youth. Effective May 1, 2008 anyone who sells tobacco or tobacco products in Long Beach must apply for an annual City of Long Beach Tobacco Retail Permit. The City permit is $442 per year for each tobacco location and must be renewed annually. The estimated number of tobacco retailers in the City is 1,000, making the annual budget $442,000. This new fee was included in the 2nd quarter fee resolution and was approved by City Council on April 22, 2008. The Department is requesting budget for expenditures for the remainder of the fiscal year.
· Increase appropriations in the Health Fund (SR 130) in the Department of Health and Human Services (HE) by $245,000.
On December 11, 2007, City Council approved an agreement with the State of California Department of Health Services for a State funded STD Community Intervention Program (SCIP) and the Disease Investigation and Surveillance (DIS) program. The Health and Human Services Department was recently notified of an additional $90,000 available to cover additional program goals and now needs to be appropriated.
· Increase appropriations in the Health Fund (SR 130) in the Department of Health and Human Services (HE) by $90,000.
Parks, Recreation and Marine
On August 14, 2007, City Council accepted $235,000 from the Port of Long Beach for a portion of the costs of conducting an environmental assessment of the Colorado Lagoon Restoration Project.
This budget adjustment appropriates the funding for FY 08 so that the Department can enter into an agreement with LSA Associates, Inc. for the environmental assessment. There is no net impact to the General Fund.
· Increase appropriations in the Capital Projects Fund (CP) in the Department of Parks, Recreation and Marine (PR) by $235,000.
On July 5, 2005, City Council authorized the purchase of a 2.99-acre section of the former Pacific Electric Right-of-Way extending from Orange Ave. to Walnut Ave. for the Pacific Electric Right-of-Way Bike Trail Project at the cost of $2,416,000 in the Capital Projects Fund. This budget adjustment appropriates the funding for FY 08 in order to complete the purchase. There is no net impact to the General Fund.
· Increase appropriations in the Capital Projects Fund (CP) in the Department of Parks, Recreation and Marine (PR) by $2,416,000.
Police
The Police Department will receive $26,770 from the California Department of Corrections to fund training for the Long Beach City Jail staff under its Standards and Training for Corrections Program.
This revenue will offset expense for the required training hours for Jail management staff.
· Increase appropriations in the General Fund (GP) in the Police Department (PO) by $26,770.
The Police Department has received $10,740 in reimbursement from Los Angeles County for Proposition 69, the DNA Fingerprint Unsolved Crime and Innocence Protection Act. The reimbursement is for DNA samples taken from prisoners booked into Long Beach City Jail which are then submitted to the County and results of which are entered into the State's DNA Offender Tracking System (DOTS). This appropriation increase will offset the licensing and certification costs required for the Jail staff to access the DOTS system.
· Increase appropriations in the General Fund (GP) in the Police Department (PO) by $10,740.
Public Works
Dock 9, located in Shoreline Village adjacent to Parker's Lighthouse restaurant, services the Aqua Bus water taxi operated by Long Beach Transit. Boarding from the dock is physically difficult because of the height difference between the dock and the boarding area of the vessel. Proposition A funding designated for mass transit services and facilities in the amount of $50,000 will allow modifications to the existing ramp to provide safe embarkation and disembarkation for Aqua Bus passengers.
· Increase appropriations in the Transportation Fund (SR 182) in the Department of Public Works (PW) by $50,000.
Due to the popularity of the Dog Beach and Recreation Park Dog Park, combined with the growing demand from downtown residents, the Department of Parks, Recreation and Marine has designed a dog park of approximately 0.7 acres within Lincoln Park, located in the downtown Civic Center complex. The design includes a decorative security fence surrounding the area for dogs, benches, drinking fountains and an independent lighting system. A budget adjustment is necessary to cover the cost of the new dog park.
· Increase appropriations in the Civic Center Fund (IS 380) in the Department of Public Works (PW) by $65,000.
Councilmember Gary Delong has agreed to provide $25,000 in funding from his FY 08 Council Office budget to the Public Works Sidewalk Program to repair and replace additional portions of sidewalk within the Third District. A budget adjustment is necessary to transfer the funds to the Capital Improvement Program.
· Decrease appropriations in the General Fund (GP) in the legislative Department (lD) by $25,000.
· Increase appropriations in the General Fund (GP) in the Citywide Activities Department (XC) by $25,000.
· Increase appropriations in the Capital Projects Fund (CP) in the Department of Public Works (PW) by $25,000.
Tidelands
As a result of an increase in projected oil revenues and prior year cost savings, a number of deferred capital projects and operational enhancements totaling $575,000 are recommended in the Tidelands Operating Funds (TF).
The restroom at Marine Stadium is old and inadequate for the needs of the location including the many special events that take place there. It will be replaced with a pre-fabricated restroom unit and new plumbing for $300,000.
Several beach site refurbishment projects are planned to enhance well-used areas along the beachfront, including sand for beach volleyball courts for $95,000; a shade cover for the amphitheatre area of Rainbow Harbor for $75,000; and temporary docks for downtown City sponsored events for $30,000.
The Alamitos Bay Circulation Study findings showed that when power plant pumps are off or operating at low velocity, the resulting water quality is poor, due in part to the low circulation in the area. AES Alamitos L.L.C (AES) owns and operates circulation pumps which are normally operated on a Monday through Friday schedule to help control water quality in Alamitos Bay Marina. In an effort to improve water quality in the area, the purchase of weekend pumping services from AES is recommended on an as requested basis at an annual cost of up to $75,000.
· Increase appropriations in the Tidelands Operating Fund (TF) in the Department of Parks, Recreation and Marine (PR) by $575,000.
In anticipation of increased crowds at the beaches and marinas during the summer months, the Police Department has assigned additional presence to the beach areas and Rainbow Harbor, at an estimated cost of $150,000.
· Increase appropriations in the Tidelands Operating Fund (TF) in the Police Department (PO) by $150,000.
Technology Services
Various City Departments have requested video production services and installation of new telephone technology, which are currently unbudgeted. These new agreements require additional expenditures that will be offset by revenue from the receiving departments.
· Increase appropriations in the General Services Fund (IS 385) and in the Department of Technology Services (TS) by $41,244.
On November 13, 2007 the City Council authorized the City Manager to receive and expend Department of Homeland Security grant funding for the 2006 Urban Area Security Initiative (UASI) grant at an amount not to exceed $6,367,040. The State has recently approved the transfer of $200,000 in 2006 UASI funding, previously approved Health Department Information Exchange Network project, to the Police Department for the purchase of additional radio equipment. In order to expend the funds by the grant deadline, an appropriation shift is needed from the Department of Health and Human Services to the Technology Services Department.
· Increase appropriations in the General Grant Fund (SR 120) in the Department of Technology Services (TS) by $200,000.
· Decrease appropriations in the General Grants Fund (SR 120) in the Department of Health and Human Services by $200,000.
Citywide
The City is a designated recipient of Proposition A Local Return funds from the Metropolitan Transportation Authority (Metro). These funds are designated solely for public transit purposes, for which the City and Long Beach Transit are currently in a Nine-Year Operating Agreement. Under the terms of the Agreement, the City forwards to Long Beach Transit up to 70 percent of the Proposition A funds that are received. Current appropriations of $4,964,000 are insufficient to fund the estimated FY 08 transfer to Long Beach Transit of $5,558,823.
· Increase appropriations in the Transportation Fund (SR) in the Citywide Activities Department (XC) by $594,823.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
LORI ANN FARRELL |
APPROVED: |
DIRECTOR OF FINANCIAL MANAGEMENT/CFO |
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PATRICK H. WEST |
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CITY MANAGER |