TITLE
Recommendation to approve the Fiscal Year 2016 fourth departmental and fund budget appropriation adjustments in accordance with existing City Council policy. (Citywide)
DISCUSSION
On September 15, 2015, the City Council adopted the Appropriations Ordinance governing the City’s Adopted Budget for Fiscal Year 2016 (FY 16). 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. By the City’s practice, these adjustments are presented to the City Council periodically throughout the year for consideration. Please see Attachment A for a Summary of Proposed Adjustments of impacted City funds and Attachment B for a recapitulation of FY 16 General Fund Expenditure Budget Adjustments.
This matter was reviewed by Deputy City Attorney Amy R. Webber on November 17, 2016.
TIMING CONSIDERATIONS
The following requests for adjustments to FY 16 departmental and fund appropriations are necessary to reflect changes in operating conditions. City Council action is requested on December 6, 2016, to enable the timely processing of payments.
FISCAL IMPACT
Development Services
Increase appropriations in the General Grants Fund (SR 120) in the Development Services Department (DV) by $230,000 as a technical correction to align budget with actual expenses, offset by higher revenues received than budgeted.
Increase appropriations in the Housing Development Fund (SR 135) in the Development Services Department (DV) by $756,000 as a technical correction to align budget with actual expenses, offset by higher revenues received than budgeted.
The Development Services Department is making technical corrections to align budget with actuals in grants or projects funds for projects that have been completed.
Economic and Property Development
Increase appropriations in the General Fund (GF) in the Economic and Property Development Department (EP) by $377,271 for administrative costs associated with the disposition of former Redevelopment properties, fully offset by fees collected during property sales.
The Economic and Property Development Department receives a 5 percent administrative recovery fee for the sale of each former Redevelopment property. The costs incurred by the Department in managing and maintaining the properties until they are sold are offset from the fee revenue.
Increase appropriations in the General Fund (GF) in the Economic and Property Development Department (EP), Workforce Development Bureau by $128,401 for the transfer of funds to balance prior years’ allowable pooled costs associated with the Workforce Investment Act, offset by funds available in the General Fund.
The Economic and Property Development Department, Workforce Development Bureau pools shared costs that cannot be readily assigned to a specific grant. Throughout the year these pooled costs are allocated to grants proportionate to the costs incurred by each grant. It has been determined that $128,401 in prior year costs (2005-2010) for the Workforce Investment Act (WIA) grants were not allocated during the appropriate grant appropriation period. It is not allowable to charge prior year costs to new federal Workforce Innovation Opportunity Act (WIOA) grants. Under federal guidelines these grants are highly restrictive and audited in specific areas, such as allowable Cost Pool Allocations. In order to balance the unallocated expenses in the cost pool, an appropriation increase for a transfer of funds from the General Fund to the Community Development Grants Fund is necessary and offset by funds available in the General Fund.
Fire
Increase appropriations in the General Fund (GF) in the Fire Department (FD) by $1,115,021 for overtime expenses related to staffing assistance for California wild land fires, offset by reimbursement revenue from the State of California.
The Fire Department provided staffing assistance for California wild land fire events during FY 16. As the overtime expense for backfilling the employees who provided support for fighting these wild land fires is unbudgeted, an appropriation increase is necessary and will be offset by reimbursement revenue from the State of California.
Increase appropriations in the General Fund (GF) in the Fire Department (FD) by $1,098,031 for additional costs incurred by the Department for the unbudgeted termination of the Rapid Medical Deployment (RMD) model in FY 16, offset by First Responder Fee revenues.
On August 26, 2015, the Los Angeles County Emergency Medical Services Agency notified the Long Beach Fire Department that they were terminating the RMD Pilot Project and that by October 1, 2015, the Department must return to the previous staffing model of two Paramedics on all Advanced Life Support (ALS) ambulances. In response to this notification, the Fire Chief presented a plan to the City Council on how it would address the anticipated $1.4 million budget impact to the Department. The plan included steps to reduce annual operating costs, identify potential First Responder Fee revenues above what was budgeted in FY 16, and set-aside FY 15 year-end savings to cover any remaining shortfalls. As of FY 16 year-end, the Department was able to achieve operational savings and apply that towards the unbudgeted cost of the RMD termination. The remaining cost of $1,098,031 will be offset by First Responder Fee revenues.
Increase appropriations in the General Fund (GF) in the Fire Department (FD) by $164,000 for special events staffing, offset by reimbursement from production companies and event promoters.
The Fire Department provides staffing at various special events throughout the year, including movie and television filming, the Grand Prix and Formula E. In FY 16, larger events and a higher number of events were staffed than what was budgeted and, therefore, an appropriation increase is needed for the unbudgeted staffing costs. The increase in appropriation is fully offset by reimbursement revenues received from production companies and event promoters.
Increase appropriations in the General Fund (GF) in the Fire Department (FD) by $18,000 for the training center, offset by reimbursement from outside agencies.
The Fire Department’s training center is used by outside agencies for a variety of training purposes. Costs incurred for providing the training center to these agencies is unbudgeted. The appropriation increase is fully reimbursed by revenue received from outside agencies.
Legislative
Increase appropriations in the General Fund (GF) in the Legislative Department (LD) by $10,660 for the Conference of Mayors’ Membership fee, offset by the Mayor’s Office FY 15 office budget surplus.
In FY 16, two annual membership payments for the Conference of Mayors (one for FY 16 and one for FY 17) were paid. To help offset the cost of this double payment, the Legislative Department is requesting an appropriation increase in the amount of $10,660, which was the FY 15 year-end surplus from the Mayor’s Office. Due to this FY 15 surplus from the Mayor there is no impact to General Fund Funds Available.
Parks, Recreation and Marine
Increase appropriations in the Special Advertising and Promotion Fund (SR 133) in the Parks, Recreation and Marine Department (PR) by $42,730 for the Municipal Band, offset by sponsorship and private donation revenues.
Increase appropriations in the Tidelands Operating Fund (TF 401) in the Parks, Recreation and Marine Department (PR) by $47,500, for the Municipal Band, offset by sponsorship and private donation revenues.
The Parks, Recreation and Marine Department is requesting an appropriation increase in the amount of $42,730 in the General Fund and $47,500 in the Tidelands Operating Fund to pay for activities associated with the 2016 Municipal Band Summer Concert Season. These increases in appropriation are fully offset by revenues generated from sponsorship and private donations.
Public Works
Increase appropriations in the Capital Projects Fund (CP) in the Public Works Department (PW) by $28,000,000 for the Long Beach Municipal Urban Stormwater Treatment Facility (LB-MUST), offset by reimbursement revenue from the California Department of Transportation (CalTrans).
On April 19, 2016, the City Council authorized the City Manager to execute a Cooperative Implementation Agreement (CIA) with CalTrans to provide up to $28 million in reimbursement funding for the design and construction of the LB-MUST. This project will result in the creation of a facility that will provide treatment of urban runoff prior to going into the Los Angeles River. As the development of the LB-MUST project moves forward, additional funding will need to be identified and brought forward to the City Council for review and approval in order to complete and operate the project.
Increase appropriations in the Capital Projects Fund (CP) in the Public Works Department (PW) by $13,274 for a parklet project on Artesia Boulevard, offset by revenue from the Long Beach Gas and Oil Department.
In FY 16, the Public Works and Long Beach Gas and Oil Departments coordinated to complete a parklet project on Artesia Blvd. The total project cost was $39,821, with Long Beach Gas and Oil funding one-third of the project. An appropriation increase of $13,274 is requested for the portion of the project offset by revenue from the Long Beach Gas and Oil Department. The remaining project cost is supported by a combination of Los Angeles County Measure R funds and City Council District 9 discretionary funds, which were previously appropriated.
Increase appropriations in the General Fund (GF) in the Public Works Department (PW) by $531,868 for increased operational expenses at the City Place Garage and various City lots, offset by parking revenues.
Increase appropriations in the Rainbow Harbor Area Fund (TF 411) in the Public Works Department (PW) by $277,681 for operational expenses at meters and garages in Rainbow Harbor Area, offset by parking revenues.
Over the years, the operational expenses for City Place Garage and various City lots have increased due to the annual CPI increase for the parking management contractor, equipment and software upgrades, higher than anticipated credit card fees and added maintenance service agreements. An appropriation increase of $531,868 in the General Fund and $277,681 in the Rainbow Harbor Area Fund is requested for the unbudgeted costs related to lots, meters and garages in Rainbow Harbor and City Place. The increase is fully offset from higher than budgeted parking revenues from these areas.
Increase appropriations in the Rainbow Harbor Area Fund (TF 411) in the Public Works Department (PW) by $788,143, offset by parking revenues from the Pike Garage.
In 2005, the City and the Aquarium of the Pacific entered into an implementation agreement to share net parking revenues to fund the debt service for public capital improvements to the Aquarium facility. The implementation agreement ended in 2012. Since then, the City has entered into an agreement with the trustee and is directly paying the bond payments from net revenues. An increase of $788,143 is requested to align appropriations to actual expenditures and is fully offset by Pike Garage parking revenues.
Increase appropriations in the General Fund (GF) in the Public Works Department (PW) by $281,200 for hazardous waste spills on Public Works-controlled streets, alleys and infrastructure, offset by funds available in the General Fund.
For several years, the Health and Human Services Department (Health Department) Environmental Health Bureau, Hazardous Materials (HazMat) Division, has been providing Emergency Response program activities for the City. These activities involve response at the request of a department, such as Public Works, to oversee cleanups of incidents of spilled, illegally disposed of, or abandoned hazardous chemicals. Since 2008, 100 percent of these program costs have been absorbed by the Health Fund. An appropriation increase of $281,200 is requested in the Public Works Department for the transfer of funds to the Health Department to reimburse the cost of responding to HazMat spills that occur on Public Works-controlled streets, alleys and infrastructure. This aligns the funding source and department responsibility. In FY 17 and beyond, this will be a Public Works expense.
Decrease appropriations in the General Fund (GF) in the Public Works Department (PW) by $960 to correct a transfer between funds for tree well irrigation installation.
On September 20, 2016, the City Council approved an appropriation increase request of $960 in the General Fund in the Public Works Department for installation of tree well irrigation, offset by a transfer of one-time Divide by Nine Funds from the Capital Projects Fund. The request was an error as the project expense should reside in the Capital Projects Fund. The requested appropriation decrease will correct the error.
Citywide
Increase appropriations in the Rainbow Harbor Area Fund (TF 411) in Citywide Activities Department (XC) by $25,822,668 for Rainbow Harbor bond refinancing, offset by the 2016 bond proceeds and unused 2006 bond proceeds for reserve requirement.
On July 19, 2016, the City Council approved the issuance of the Rainbow Harbor Lease Revenue Refunding Bonds (RHLRRB) Series 2016B to refund the Long Beach Bond Finance Authority RHLRRB 2006 Series A, in order to take advantage of an estimated savings of $3,000,000 in present value for the life of the loan. This bond refunding reduced the annual debt service payment by an estimated amount of $500,000. A budget adjustment is necessary to increase budgeted revenue and appropriations for the proceeds and cost of issuance of RHLRRB Series 2016B and payment of RHLRRB Series 2006A Bonds.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
JOHN GROSS
DIRECTOR OF FINANCIAL MANAGEMENT
APPROVED:
PATRICK H. WEST
CITY MANAGER