TITLE
Recommendation to approve the Fiscal Year 2016 first 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. In accordance with the City’s practice, these adjustments are presented periodically throughout the year to the City Council for consideration. Please see Attachment A for a Summary of Proposed Adjustments of impacted City funds and Attachment B for a recap of FY 16 General Fund Expenditure Budget Adjustments.
This matter was reviewed by Deputy City Attorney Amy R. Webber on January 28, 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 February 16, 2016 to enable the timely processing of payments.
FISCAL IMPACT
FY 16 Appropriation Adjustments
Airport
Increase appropriations in the Airport Fund (EF 320) in the Airport Department (AP) by $77,500 from funds available for the remaining payment of the Annual Airports Council International - North America Conference of 2015.
On September 10, 2013, the City Council authorized the Long Beach Airport to partner with the Long Beach Convention and Visitors Bureau to host the Annual Airports Council International - North America (ACI-NA) Conference of 2015. The event was held on October 2 through October 7, 2015 at the Long Beach Convention Center and drew over 2,000 attendees from the industry including airlines, airports, corporate and general aviation representatives, Federal Aviation Administration (FAA), Department of Homeland Security (DHS) and Transpiration Security Administration (TSA). The required payment of $155,000 to ACI-NA for hosting the event is split into two equal payments with the first half paid prior to the event in FY 15, and the second half paid after the event in FY 16. The expenditure is fully covered by existing operating revenues of the Airport and is classified as an acceptable expenditure by the FAA.
Development Services
Increase appropriations in the General Fund (GF) in the Development Services Department (DV) by $46,365, offset by Parcel Owner contributions for the Promenade Maintenance District.
The Development Services Department manages the Promenade Maintenance District (District), which ensures maintenance and repair of the Promenade located between Ocean Boulevard and Third Street, excluding Promenade Square Park and Harvey Milk Promenade Park. The costs associated with this maintenance are offset by quarterly payments from “Promenade Parcel Owners” who are obligated to participate in the District as a result of development agreements with the former Redevelopment Agency. The annual expenses for maintenance are paid from the Department’s General Fund and are offset by Parcel-Owner contributions; however, the annual revenue and expense of $46,365 were not budgeted for FY 16. Revenue and expense budget for future years will be requested during the FY 17 budget development process.
Increase appropriations in the Development Services Fund (EF 337) in the Development Services Department (DV) by $75,000, offset by fund balance to educate tenants and landlords relating to the Proactive Rental Housing Inspection Program (PRHIP).
On June 23, 2015, the City Council adopted an ordinance amending the Long Beach Municipal Code by adding Chapter 18.30 relating to a Proactive Rental Housing Inspection Program (PRHIP). At this meeting, the City Council directed staff to use up to $75,000 to educate tenants and landlords to create a comprehensive outreach program. A Request for Proposals (RFP) was conducted to identify a vendor, who will be selected in FY 16. This cost for PRHIP is funded from the Department’s FY 15 General Fund savings, which has been transferred to the Development Services Fund for this purpose.
Increase appropriations in the Development Services Fund (EF 337) in the Development Services Department (DV) by $60,000, offset by revenue from a judgment for the demolition at 2910 and 2914 Hill Street.
The Development Services Department received a stipulated judgment authorizing the demolition of two substandard buildings at 2910 and 2914 Hill Street that were deemed a public nuisance. The cost of demolition will be recovered by labor and performance bonds issued on behalf of the property owner to ensure compliance with the court order.
Increase appropriations in the General Fund (GF) in the Citywide Activities Department (XC) by $1,417,753 for a transfer to the Successor Agency Fund, offset by the release of funds reserved for Successor Agency transition costs; and increase appropriations in the Successor Agency Fund (SA 270) in the Development Services Department (DV) by $1,417,753 for anticipated shortfalls.
As part of the Successor Agency funding process, the California Department of Finance (DOF) disallowed in excess of $1.3 million in Successor Agency expenditures during the initial Recognized Obligation Payment Schedule (ROPS) process. In order to cover a projected shortfall during the July 2016 through June 2017 ROPS period, funds will be released from a General Fund reserve that was set aside for Successor Agency expenses.
Economic and Property Development
Increase appropriations in the Community Development Grants Fund (SR 150) in the Economic and Property Development Department (EP) by $4,822,361, offset by a decrease in appropriations in the Community Development Grants Fund (SR 150) in the Human Resources Department (HR) to transfer carryover grant balances.
Budget amounts not spent by the end of a fiscal year for multi-year grants are carried forward and re-appropriated in the ensuing fiscal year. Grant appropriation that was budgeted in the Workforce Development Bureau in the Human Resources Department needs to be transferred to the newly created Economic and Property Development Department. This transaction moves appropriation from one department to another with no net change in total appropriation.
Increase appropriations in the Belmont Shore Parking Meter Fund (SR 136) in the Economic and Property Development Department (EP) by $102,188, offset by a decrease in appropriations in the Belmont Shore Parking Meter Fund (SR 136) in the Public Works Department (PW) to transfer appropriations for parking meter consultant costs.
Existing appropriations to cover parking meter consultant costs currently reside in Public Works. However, the funds should be housed in the newly created Economic and Property Development Department. This transaction moves appropriation from one department to another with no net change in total appropriation.
Financial Management
Increase appropriations in the Fleet Services Fund (IS 386) in the Public Works Department (PW) by $480,000, offset by a decrease in appropriations in the Fleet Services Fund (IS 386) in the Financial Management Department (FM) for the construction of an above-ground storage tank fuel site at the West Police Substation.
On December 8, 2015, the City Council approved a request to increase appropriations in the Fleet Services Fund in the Financial Management Department for construction of an above-ground storage tank at the West Police Substation. However, all capital projects in the Fleet Services fund should be budgeted in the Public Works Department. This transaction moves appropriation from one department to another with no net change in total appropriation.
Increase appropriations in the Fleet Services Fund (IS 386) in the Public Works Department (PW) by $500,000, offset by a decrease in appropriations in the Fleet Services Fund (IS 386) in the Financial Management Department (FM) for the construction of a CNG fueling station.
On November 17, 2015, the City Council approved a request to increase appropriations in the Fleet Services Fund in the Financial Management Department for construction of a CNG fueling station at the Temple/Willow facility. However, all capital projects in the Fleet Services Fund should be budgeted in the Public Works Department. This transaction moves appropriation from one department to another with no net change in total appropriation.
Health and Human Services
Increase appropriations in the Health Fund (SR 130) in the Health and Human Services Department (HE) by $300,000, offset by the release of funds reserved for this purpose for deferred infrastructure needs at various Health facilities; and increase appropriations in the General Fund (GF) in the Health and Human Services Department (HE) by $154,277, offset by a transfer from the Health Fund for deferred infrastructure needs.
The Health and Human Services Department has identified multiple prioritized capital needs at its Main, Central, Multi-Service Center (MSC) and North Health facilities. The $300,000 appropriation increase in the Health Fund will cover multiple projects at these facilities such as renovation and maintenance, multiple HVAC replacements and upgrades, asbestos remediation, drainage, leaking and roof repairs. Of the $300,000, $145,723 will be used to support the Main Health facility. The remaining $154,277 will be transferred to the General Fund (GF) to support Central, MSC, and North Health facilities. Funds are available in the Health Fund for Health facility infrastructure needs.
Human Resources
Increase appropriations in the Employee Benefits Fund (IS 391) in the Human Resources Department (HR) by $200,000, offset by the release of funds set aside for legal services related to labor contract bargaining.
Agreement No. 33811 with the legal firm of Atkinson, Andelson, Loya, Ruud & Romo was issued in the amount of $200,000 to represent the City’s interests in ongoing labor negotiations. The appropriation increase of $200,000 will be offset by funds set aside in the Employee Benefits Fund for efforts related to labor negotiations.
Increase appropriations in the Employee Benefits Fund (IS 391) in the Human Resources Department (HR) by $150,000, offset by the release of funds set aside for legal services with the International Association of Machinists and Aerospace Workers (IAM) and to cover related Public Employment Relations Board charges.
On November 3, 2015, the City Council approved an increase of $150,000 for Agreement No. 33765 with the legal firm of Rutan & Tucker, bringing the total authorization to $425,000. The firm represents the City’s interests in IAM labor negotiations and related Public Employment Relations Board (PERB) charges against the City. The additional amount will allow the firm to continue its services on behalf of the City. The appropriation increase of $150,000 will be offset by funds set aside in the Employee Benefits Fund for efforts related to labor negotiations.
Library
Increase appropriations in the General Grants Fund (SR 120) in the Library Services Department (LS) by $218,517 for book purchases, senior and reading programs, furnishings, a mobile studio and a webpage benefiting veterans, offset by donated revenue received from various sources.
The Long Beach Public Library (LBPL) has received revenue totaling $218,517 from the following sources: JetBlue payments in lieu of fines in the amount of $108,000 for new books to benefit all library sites equally; $3,938 and $1,450 from the Slaybaugh and Burcham endowments, respectively, to purchase children’s and preschool books; $6,386 from the Gutenberg Endowment for high-quality book purchases; $2,000 from the Long Beach Public Library Foundation (LBPLF) in honor of Kurt Schulzman and Richard Neri for books and materials on marine life and ocean themes to be housed in the new North Library; $19,243 from the Patricia Andrews Endowment for book purchases or for materials and programs benefitting seniors; $13,500 from the LBPLF for parking reimbursement to be spent on furnishings for the public areas of the Main Library; LBPL has received $22,500 and $25,000 of revenue, respectively, by the LGA Family Foundation and California Resources Corporation to establish a mobile studio offering MakerSpace programming at branch libraries; and, LBPL has received $16,500 from LBPLF for a Coming Home Veteran’s Project to design, host and maintain a webpage with local resources for returning Long Beach veterans.
Parks, Recreation & Marine
Increase appropriations in the Capital Projects Fund (CP) in the Parks, Recreation and Marine Department (PR) by $1,000,000, offset by a decrease in appropriations in the Capital Projects Fund (CP) in the Public Works Department (PW) for the Willow Springs Park Wetlands Restoration Project.
The City Council appropriated $1,000,000 in the Public Works Department for the Willow Springs Park Wetlands Restoration Project in the FY 14 Adopted Budget. However, the funds should be housed in the Parks, Recreation and Marine Department, which is currently responsible for managing the project. This transaction moves appropriation from one department to another with no net change in total appropriation.
Increase appropriations in the Capital Projects Fund (CP) in the Parks, Recreation and Marine Department (PR) by $500,000, offset by revenue from construction and demolition forfeitures for rehabilitation of the Southern Pacific Train Depot at Willow Springs Park.
On April 15, 2014, the City Council appropriated $418,610 for the relocation and rehabilitation of the Southern Pacific Train Depot (Depot) at Willow Springs Park (Park). The Depot is a Mission Revival-style facility originally built in 1906 on Broadway in downtown Long Beach. At the Park, the Depot will be restored and used as a visitors’ center. Additional funding of $500,000 from construction and demolition forfeiture revenue for the Depot rehabilitation project has been budgeted in the Development Services Fund in the Development Services Department in the FY 16 Adopted Budget. An appropriation increase in the Parks, Recreation and Marine Department is needed to account for the receipt of funds from the Development Services Department and to amend the existing Depot project budget.
Police
Increase appropriations in the General Fund (GF) in the Disaster Preparedness and Emergency Communications Department (DC) by $76,288, offset by a decrease in appropriations in the General Fund (GF) in the Police Department (PD) for one Payroll/Personnel Assistant II.
As part of the FY 16 Adopted Budget, the City Council approved the transfer of 65 Public Safety Dispatcher positions from the Police Department to the Disaster Preparedness and Emergency Communications Department (DC). As part of the consolidation, all administrative functions relating to the Public Safety Dispatchers were also transferred to DC. This budget transfer will provide DC with one Payroll/Personnel Assistant II FTE for personnel-related administrative functions. This transaction moves appropriation from one department to another with no net change in total appropriation.
Increase appropriations in the General Grants Fund (SR 120) in the Police Department (PD) by $236,013, offset by the State COPS 15 grant for front-line law enforcement efforts and supplies.
The Police Department received a total of $851,256 for grant year 2015 from the State of California Citizens Option for Public Safety Program funding from the County of Los Angeles Supplemental Law Enforcement Services Fund (State COPS), of that amount $615,243 was previously appropriated. The remaining $236,013 will be used for front-line law enforcement efforts, including supply purchases.
Increase appropriations in the General Grants Fund (SR 120) in the Police Department (PD) by $39,521, offset by the State COPS 16 grant for front-line law enforcement efforts and for a Deputy Probation Officer.
The Police Department received a grant award of $39,521 for grant year 2016 from the State of California Citizens Option for Public Safety Program funding from the County of Los Angeles Supplemental Law Enforcement Services Fund (State COPS). These State COPS funds will be used for front-line law enforcement efforts, including overtime hours and equipment to support a Deputy Probation Officer assigned by the County of Los Angeles, from their Specialized Enforcement Operations division, to provide enhanced probation services to Long Beach.
Decrease appropriations in the Tidelands Operations Fund (TF 401) in the Police Department (PD) by $73,941 to align the budget with the FY 16 Port MOU.
The Police and Harbor Departments have signed an FY 16 Memorandum of Understanding (MOU) for policing services at the Port. During discussions between the Police Department and the Harbor Department, charges for specific services were negotiated to reflect actual use. A decrease of appropriations by $73,941 in the Tidelands Operations Fund is necessary to align the budget with the MOU for administrative overhead and support. The revenue received from the Harbor Department will also be reduced. The administrative overhead is budgeted as General Fund revenue and will be decreased to equal the signed MOU.
Increase appropriations in the Police and Fire Public Safety Oil Production Act Fund (SR 121) in the Police Department (PD) by $308,604 to offset a portion of the costs for a second police academy, offset by Police and Fire Public Safety Oil Production Act Fund FY 15 Year-End Surplus.
The Police Department realized a savings of $308,604 in FY 15 in the Police and Fire Public Safety Oil Production Act Fund (Prop H). The savings were primarily in personnel and fleet. The Department is conducting a second police academy this year and will use the $308,604 savings to partially offset those costs.
Public Works
Increase appropriations in the Capital Projects Fund (CP) in the Public Works Department (PW) by $8,794, offset by claim reimbursement revenue for refurbishment and repair of the Expo building.
In FY 15, the City received $398,794 from an insurance claim reimbursement for the refurbishment and repair of the Expo building located on 4321-4325 Atlantic Avenue, of which $230,000 was appropriated in FY 15 and $160,000 in FY 16, leaving an unbudgeted amount of $8,794. The project includes repairing the roof to prevent further leaks and water damage, as well as tenant improvements. Work performed will minimize structural deficiencies and extend the facility’s useful life.
Increase appropriations in the Capital Projects Fund (CP) in the Public Works Department (PW) by $32,601, offset by smart parking meter revenue for a future parking-related improvement project in the downtown area.
On December 2, 2014, the City Council approved the purchase and installation of new smart parking meters throughout the City, including the downtown area. The Downtown Long Beach Business Association (DLBA) participates in a revenue sharing agreement with the City and receives half of the net revenue generated by downtown area parking meters. The DLBA is responsible for half of the upfront costs of the downtown area smart meters, which they pay off over time, using their portion of parking meter revenue. The City retains the revenue related to DLBA’s upfront costs to implement future parking-related improvements in the downtown area. The FY 15 portion of upfront costs to be used for this purpose totals $32,601 and is currently unbudgeted.
Increase appropriations in the Capital Projects Fund (CP) in the Public Works Department (PW) by $18,040, offset by private donations for alley repaving in the Third Council District.
The alley north of Ocean Boulevard between Laguna Place and Dana Place has a negative slope causing alley runoff to spill into private property. Since the City no longer has an alley program, the City has agreed to fund a portion of the alley repaving, with the remaining funds coming from the affected homeowners. The total cost of the project is $27,060, of which $9,020 is currently budgeted in the Capital Projects Fund (CP). The remaining cost of $18,040 is currently unbudgeted and will be offset by private donations.
Increase appropriations in the Capital Projects Fund (CP) in the Public Works Department (PW) by $275,000, offset by the release of funds set aside for this purpose for Fire Department Training Center Drill Yard rehabilitation.
The Long Beach Fire Department Training Center was built in 1964. Much of the concrete drill area used by fire recruits and firefighters for training is the original concrete poured at the time of construction. Wear and tear over time and the increased weight of fire apparatus has left much of the drill yard cracked and uneven, resulting in poor drainage and trip hazards for firefighters and individuals from other agencies using the drill grounds. This project would repair the most damaged areas of the drill yard. The appropriation increase will be offset by funds set aside in the Capital Projects Fund to support this improvement.
Appropriations Using FY 15 Year-End Surplus
In FY 15, the General Fund and Uplands Oil Fund ended the fiscal year with an ending funds available of approximately $4.2 million and $0.9 million, respectively. The following appropriations implement a portion of the proposals recommended in the FY 15 Year-End Performance Report funded from the Year-End Surplus in the General Fund and Uplands Oil Fund.
Increase appropriations in the General Fund (GF) in the Police Department (PD) by $3,300,000 to offset a portion of the costs for a second police academy, offset by $2,500,000 General Fund FY 15 Year-End Surplus and $800,000 Uplands Oil Fund FY 15 Year-End Surplus; and increase appropriations in the Uplands Oil Fund (SR 134) in the Long Beach Gas and Oil Department (GO) by $800,000 to transfer funds available to the General Fund.
Increase appropriations in the General Fund (GF) in the Police Department (PD) by $200,000 for additional helicopter flight hours, offset by General Fund FY 15 Year-End Surplus.
Increase appropriations related to the City Council’s policy to reserve 5 percent to unfunded liability in the General Fund (GF) in the Citywide Activities Department (XC) by $210,251, offset by General Fund FY 15 Year-End Surplus.
Increase appropriations to fund 5 percent to unfunded liability in the amount of $44,593 in the Uplands Oil Fund (SR 134) in the Long Beach Gas and Oil Department (GO), offset by Uplands Oil Fund FY 15 Year-End savings.
FY 14 and FY 15 Non-Recurring Funds to be Reappropriated
In FY 14 and FY 15, the City Council authorized the allocation of non-recurring funds to be used for specific department projects. The following appropriations are needed to carry over the funds to FY 16 to complete these projects. These unspent non-recurring funds have been reserved for this purpose.
Increase appropriations for computer and telephone infrastructure at the Emergency Communication and Operations Center in the General Fund (GF) in the Disaster Preparedness and Emergency Department (DC) by $48,000, offset by unspent FY 15 non-recurring funds.
Increase appropriations for the LAEDC Minimum Wage Study in the General Fund (GF) in the Economic and Property Development Department (EP) by $75,000, offset by unspent FY 15 non-recurring funds.
Increase appropriations for the Alliance for Housing and Healing in the General Fund (GF) in the Health and Human Services Department (HE) by $22,500, offset by unspent FY 15 non-recurring funds and the Mayor’s Expendable Trust.
Increase appropriations for parks water conservation capital projects in the Capital Projects Fund (CP) in the Public Works Department (PW) by $365,000, offset by unspent FY 15 non-recurring funds.
Increase appropriations for body cameras in the General Fund (GF) in the Police Department (PD) by $210,000, offset by unspent FY 15 non-recurring funds.
Increase appropriations for community improvement and community engagement activities for the remainder of the one-year period in the Sixth Council District in the General Fund (GF) in the Economic and Property Development Department (EP) by $40,378, offset by unspent FY 15 non-recurring funds.
Increase appropriations for the M4 to M5 Upgrade in the Fleet Services Fund (IS 386) in the Financial Management Department (FM) by $126,276, offset by unspent FY 14 non-recurring funds.
Increase appropriations for the Fueling System Upgrade in the Fleet Services Fund (IS 386) in the Financial Management Department (FM) by $221,057, offset by unspent FY 14 non-recurring funds.
Increase appropriations to replace credit card readers to new chip technology in the General Fund (GF) in the Parks, Recreation and Marine Department (PRM) by $20,000, offset by unspent FY 14 non-recurring funds.
Increase appropriations for the North Library security alarm system in the General Fund (GF) in the Library Services Department (LS) by $32,936, offset by FY 14 non-recurring funds.
Increase appropriations to review and revise testing materials and processes in the General Fund (GF) in the Civil Service Department (CS) by $60,000, offset by FY 15 non-recurring funds.
Increase appropriations for the LA River Cleanup in the General Fund (GF) in the Health and Human Services Department (HE) by $44,974, offset by FY 14 and FY 15 non-recurring funds.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
JOHN GROSS
DIRECTOR OF FINANCIAL MANAGEMENT