TITLE
Recommendation to approve the Fiscal Year 2012 first 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 Fund Balance Analysis 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 Heather A. Mahood on January 7, 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 February 7, 2012 to enable the timely processing of payments.
FISCAL IMPACT
City Auditor
The City Auditor's budget includes monies from the Tidelands Fund to cover audit costs associated with work related to revenues and expenditures charged to the Tidelands area. For FY 12, due to Measure D oil revenue, there has been a significant increase to the Tidelands Fund which has increased the need for additional audits and reviews. The City Auditor's office is requesting $200,000 of on-going appropriation to fund Tidelands-related services.
· Increase appropriations in the Tidelands Operations Fund (TF 401) in the City Auditor Department (AU) by $200,000.
The City Auditor's budget includes $175,000 for audit services related to the Tidelands Oil Revenue Fund. This budget was inadvertently removed during FY 12 Budget preparation. This budget adjustment corrects this error and restores the funding to the same levels as in previous years.
· Increase appropriations in the Tidelands Oil Revenue Fund (NX 420) in the City Auditor Department (AU) by $175,000.
Development Services
The Revolving Loan Program for local businesses receives revenue from loan repayments and interest earnings. These revenues have resulted in a cash balance that exceeds current appropriations. In order to make these funds available to be issued as loans, it is necessary to increase appropriations to reflect available funding.
· Increase appropriations in the Business Assistance Fund (SR 149) in the Development Services Department (DV) by $580,000.
On September 20, 2011, City Council approved the extension of the Andy Street Multi-Family Improvement District for the period from October 1, 2011 to September 30, 2012. The budget approved for this project is $111,652, which will be fully offset by a combination of new FY 12 assessment revenues and carryover from prior years. To fund the project at approved levels, it is necessary to increase appropriations in the amount of $13,053 to match the approved amount of $111,652.
· Increase appropriations in the Parking and Business Area Improvement Fund (SR 132) in the Development Services Department (DV) by $13,053.
Health and Human Services
On September 13, 2011, as part of the FY 12 Budget adoption process, City Council approved a Memorandum of Understanding (MOU) between the Health and Human Services Department and the Harbor Department for the Asthma Life Skills Academy for Adults (ALSAA) Program. ALSAA is a three-year program that provides asthma case management program activities and services to adults and seniors in Long Beach. While the Harbor Department will fund $250,000 to implement the program in the first year, only $150,000 was budgeted. This adjustment will increase the budget to match the funding level of $250,000.
· Increase appropriations in the Health Fund (SR 130) in the Health and Human Services Department (HE) by $100,000.
On December 7, 2010, City Council approved a three-year grant with the State Department of Health Services for the Minority AIDS Initiative (MAI). The MAI provides services targeted to HIV infected persons of color and must be planned and delivered in coordination with local HIV prevention outreach services to link and transition newly diagnosed HIV infected patients into care and treatment. This budget adjustment is to appropriate the FY 12 portion of the grant award.
· Increase appropriations in the Health Fund (SR 130) in the Health and Human Services Department (HE) by $75,690.
On March 9, 2010, City Council approved a multi-year grant from the County of Los Angeles for the HIV/AIDS Health Education/Risk Reduction Program. This program was created to provide prevention services that include: community outreach, providing individual assessments of personal risk factors for both HIV-negative and HIV-positive clients, developing and utilizing a variety of strategies to enhance personal risk reduction efforts, and implementing strategies to support and maintain behavioral change. This budget adjustment is to appropriate the FY 12 portion of the grant award.
· Increase appropriations in the Health Fund (SR 130) in the Health and Human Services Department (HE) by $160,800.
Parks, Recreation and Marine
The Department of Parks, Recreation and Marine was designated $10,770 in additional funds for FY 12 from the Second Council District's FY 11 budget savings. The desired use of these funds are for recreational services in the Second District.
· Increase appropriation in the Special Advertising and Promotion Fund (SR 133) and General Fund (GP) to reflect a transfer to General Fund of appropriation for the Parks, Recreation and Marine Department (PR) by $10,770.
The Department of Parks, Recreation and Marine was designated $10,000 in additional funds for FY 12 from the Fourth Council District's FY 11 budget savings. The desired use of these funds are for a community event or recreation services at Whaley Park on a date to be determined.
· Increase appropriation in the Special Advertising and Promotion Fund (SR 133) and General Fund (GP) to reflect a transfer to General Fund of appropriation for the Parks, Recreation and Marine Department (PR) by $10,000.
The Department of Parks, Recreation and Marine was designated $29,000 in additional funds for FY 12 from the Sixth Council District's FY 11 budget savings. The desired use of these funds are for recreational services in the Sixth District.
· Increase appropriation in the Special Advertising and Promotion Fund (SR 133) and General Fund (GP) to reflect a transfer to General Fund of appropriation for the Parks, Recreation and Marine Department (PR) by $29,000.
Public Works
On February 16, 2010, City Council approved a resolution to accept grant funding from the American Recovery and Reinvestment Act (ARRA) under the Energy Efficiency Community Block Grant Program (EECBG). The grant funding was budgeted in Public Works and Development Services to improve energy efficiency in the building sector, the transportation sector, and other appropriate sectors, and reduce fossil fuel emissions in a manner that is environmentally sustainable. Public Works has identified the Long Beach Gas and Oil Department (LBGO) auditorium lighting retrofit as a priority project for the portion of the City's ARRA funds designated for energy efficiency improvements. To implement this project, it is necessary to reduce appropriations in Development Services and increase appropriations in Public Works, where the work will be completed.
· Decrease appropriations in the General Grants Fund (SR 120) in the Development Services Department (DV) by $100,000.
· Increase appropriations in the Capital Projects Fund (CP) in the Public Works Department (PW) by $100,000.
During FY 11, City Council concurred with the City Manager's recommendation to utilize General Fund FY 11 savings from not holding the budgeted Fire Academy to fund fire station capital improvements dedicated to gender accommodations. The FY 11 Fire Department General Fund savings have been transferred to the Capital Projects Fund and now need to be appropriated to initiate the projects.
· Increase appropriations in the Capital Projects Fund (CP) in the Public Works Department (PW) by $864,535.
Fleet Services is responsible for continuous annual ground water monitoring and pollution remediation reporting of former Underground Storage Tank (UST) fuel sites located at four fire stations. Fleet Services' consultant has made recommendations for upgrades and replacements based on the oldest and most worn out sumps, pump and tank systems. These improvements are needed to comply with state and federal regulations and will be paid from available fund balance.
· Increase appropriations in the Fleet Services Fund (IS 386) in the Public Works Department (PW) by $275,000.
Citywide Activities
In June 2011, City Council authorized the appropriation of FY 2011 Measure D oil revenue to begin work on high priority capital projects in the Tidelands areas. At the close of FY 11, there is additional one-time Tidelands oil revenue available for capital projects. Staff has identified projects that address infrastructure, facility and community access needs. The projects include Convention Center improvements, seawall design, beach restrooms, and additional bluff erosion control. Please see Attachment C for a detailed list of the proposed projects.
· Increase appropriations in the Tidelands Operations Fund (TF 401) in the City Manager Department (CM) by $17,145,000.
On January 5, 2010, City Council authorized the City Manager to enter into agreements with South Coast Air Quality Management Distract (SCAQMD) through the Mobile Source Pollution Prevention and Reduction Committee (MSRC) to accept $875,000 in grant funds to offset the purchase cost of 35 liquefied natural gas (LNG) refuse collection vehicles. Additionally, the City Manager was authorized to accept $46,375 in grant funds through the Carl Moyer Program to facilitate regulatory compliance by installing emission control devices on off-road, diesel-fueled equipment. Both grants have now been executed, and need to be appropriated.
· Increase appropriations in the Fleet Services Fund (IS 386) in the Public Works Department (PW) by $921,375.
As a result of governmental reform, the Parking Operations Division, which manages City-owned parking garages and facilities, was transferred from the Development Services Department to the Public Works Department. A Memorandum of Understanding (MOU) between the Redevelopment Agency and Public Works provides for the management of specific parking facilities under the authority of the Redevelopment Agency in the Downtown and Central redevelopment project areas. The operational budgets for the Downtown and Central project area are funded by parking fees from public use of Redevelopment Agency-owned lots. To facilitate administrative processing, it is necessary to appropriate funds for the Parking Operations Division within the Public Works Department. Revenue transferred from the Redevelopment Agency will offset the requested increase.
· Increase appropriations in the General Fund (GP) in the Public Works Department (PW) by $617,639.
One-Time Uplands Oil Fund Transfer
On October 4, 2011, City Council authorized the allocation of $18.4 million in one-time FY 2011 oil revenues in the Uplands Oil Fund to be used for various projects and services. Please see Attachment D for a full list of items approved.
· Increase appropriations in the General Grants Fund (SR 120) in the City Prosecutor Department (CP) by $35,000.
· Increase appropriations in the General Fund (GP) for the Development Services Department (DV) by $150,000.
· Increase appropriations in the General Fund (GP) for the Fire Department (FD) by $1,075,000.
· Increase appropriations in the General Fund (GP) for the Library Services Department (LS) by $550,000.
· Increase appropriations in the General Fund (GP) for the Police Department (PD) by $2,575,000.
· Increase appropriations in the General Fund (GP) for the Parks, Recreation and Marine Department (PR) by $500,000.
· Increase appropriations in the General Fund (GP) for the Public Works Department (PW) by $565,000.
· Increase appropriations in the Capital Projects Fund (CP) for the Public Works Department (PW) by $6,600,000.
· Increase appropriations in the General Services Fund (IS 385) for the Technology Services Department (TS) by $150,000.
· Increase appropriations in the General Fund (GP) in the Citywide Activities Department (XC) for Police Department overtime, if needed, by $2,200,000.
· Transfer $2,000,000 to increase the Emergency Reserve and $1,000,000 to reduce the FY 12 deficit in the General Fund (GP).
· Create a Committed Reserve in the General Fund (GP) of $1,000,000 for later use, in accordance with the Amended Police Officers Association Memorandum of Understanding dated September 20, 2011, to offset the City's CalPERS unfunded liability for Public Safety or mitigate layoffs.
· Increase appropriations in the Uplands Oil Fund (SR 134) in the Long Beach Gas and Oil Department (GO) by $18,400,000.
Multi-Year Funds Carry-over
Each fiscal year, appropriation increases and decreases are necessary to make technical corrections related to grants and capital projects Citywide. 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. The FY 12 Adopted Budget contained estimated amounts of carry-over balance from FY 11. The necessary corrections represent the difference between the estimate and the actual carry-over amount. Attachment E lists the corrections that require City Council approval by fund and by department for FY 12. The net adjustment for the affected funds and departments is an appropriation increase of $41,470,023. All of the funds are grant or bond proceeds and, therefore, restricted to their related projects and do not impact the General Fund.
In addition to the routine technical corrections mentioned above, grant and capital project appropriation that was budgeted in the now defunct Department of Community Development needs to be transferred to the appropriate new departments. While this transaction creates a change in the appropriation by department, there is no net difference by fund. Please see Attachment F for department detail.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
JOHN GROSS
DIRECTOR OF FINANCIAL MANAGEMENT
APPROVED:
PATRICK H. WEST
CITY MANAGER