Long Beach City Council
February 8, 2022

Department of Financial Management
411 West Ocean Boulevard, 6th Floor
Long Beach, CA 90802
(562) 570-6425

F
ebruary 8, 2022
HO

NORABLE MAYOR AND CITY COUNCIL
City of Long Beach
California
RE
COMMENDATION:

R
eceive and file the Fiscal Year 2021 Year-End Budget Performance Report and increase appropriations in several funds across several departments for various purposes to reflect final expenditures and carryover clean-up. (Citywide)

DISCUSSION
S
ummary
T
his report reflects the Cit y of Long Beach (City) Fiscal Year 2021 (FY 2 1) budget performance. The information provided is subject to change, as the books for FY 21 are not fully closed and all numbers are unaudited, although a significant change is considered unlikely. Additionally, the budgetary funds available for many funds are still being developed and thus the information provided is based on the current information available. While the financial report primarily discusses the General Fund, significant information for other funds is highlighted where applicable.

The C
ity has 161 financial funds , of which 143 are summarized and reported as 36 budgetary fund groups (35 fund groups with expenditures) covering 23 departments, including the separately managed Water and Harbor Departments. In this report, any reference and discussion of “funds” will be referring to the budgetary fund groups. Most of these funds are restricted funds, such as the Harbor Fund, Gas Fund, and Tidelands Funds, designated for specific and limited activities. Most community services provided by the City, such as police and fire services, libraries, and parks, are largely supported by the General Fund that comprises approximately 16 percent of the City’s total Adjusted Budget.

T
he FY 21 budget was established during the start of the pandemic when Long Beach, along with all other cities in the nation, faced tremendous uncertainty as to how the pandemic would impact the economy and the City’s finances for both revenue and expenditures. When the FY 21 budget was devel oped and proposed, the economy had experienced a recession and it was uncertain how severe the downturn would be and how long it would last.

T
his report shows that as of the end of FY 21, the overall fiscal impact of the pandemic was not as severe as originally anticipated, with key General Fund revenue sources, such as Sales Tax , rebounding very quickly and even surpassing FY 19 pre- pandemic performance. T he General Fund is ending the year with an operating surplus of $2. 2 million and Measure A has a net program surplus of approximately $10 million. The R-22

HONORABLE MAYOR AND CITY COUNCIL
February 8, 2022

Tidelands Operating Fund also ended with budgetary funds available of $ 2.2 million.

Recommendations on the uses of these funds are provided in this report.

On August 24, 2021, with the adoption of the FY 22 budget, the City Council identified the following projects (in no priority order) to be considered as high priority projects to be funded with year-end surplus from any relevant source: MLK Jr. Statue r estoration and park area improvements; North Long Beach Pool feasibility study; Playground design enhancements for Admiral Kidd playground and other potential playground projects , including an All Abilities Playground; Duck Pond gap funding, as necessary; tree trimming enhancements; Bluff Park Historic Lamps; Bixby Bandshell and park improvements; Gateway Sign (405 and 22) implementation; Public Fireworks show on July 4 th; and
Beach Streets. Funding to support these projects are included in the reco mmendations as part of the General Fund and Measure A Surplus recommendations, along with proposed funding for other priority projects.

The General Fund Reserves section discuss es the status of the General Fund Emergency and Operating Reserves, which is back to pre- pandemic levels, in part as a result of the City’s Long Beach Recovery Act , which provides for General Fund revenue lost during the recession. Information on funds required to be set aside as part of the Measure M litigation and the approach to address the recent appellate court ruling against the City is also discussed.

This report also includes a new section and attachment s on the Long Beach Recovery Act (LBRA), which provides an overview of the current plan and spending status as of FY 21 end. As many projects and programming were being developed in FY 21, it is anticipated that spending on programs under the Economic Recovery and Healthy and Safe Community categories of LBRA will pick up in FY 22 as more programs begin implementation. Under the category of Securi ng our City’s Future, funding has been provided for General Fund revenue that was lost due to the pandemic, which has strengthened the City’s fiscal situation and allowed for elimination of furloughs for half the year.

This report includes the following attachments:

• Attachment A – Citywide Expenditures by Fund
• Attachment B – Top 40 General Fund Revenue by Source
• Attachment C – General Fund Expenditures by Department • Attachment D – Long Beach Recovery Act Expenditures and Revenues • Attachment E – Long Beach Recovery Act Program Allocations

General Fund and Uplands Oil Fund Overview

The FY 21 budget was developed during the spring and summer of 2020 when the City was first grappling with the realities of the pandemic, along with other unexpected global events, including civil unrest, that exacerbated the strain on the City’s financial situation.

The City was in a recession period with unprecedented levels of uncertainty when

HONORABLE MAYOR AND CITY COUNCIL
February 8, 2022

General Fund Uplands
Beginning Funds Available (10/1) -$ -$ Sources
Revenues 652.72 12.73
Other Sources: (Planned release of reserves, other adjustments) 41.93 Total Sources 694.65 12.73
Uses
Expenditures (629.64) (9.81)
Other Uses: (e.g. encumbrances, reserves for carryover, etc.) (47.91) (2.93) Other Uses: Measure A Reserve/ For Future Use (14.91) - Total Uses (692.45) (12.73)
Ending Funds Available (9/30/21) 2.19$ -$ Table 1: FY 21 Performance- General Fund and Uplands Oil Fund (in $ millions)
Actuals reported in this summary exclude revenue received but are designated for Long Beach Recovery Act uses along with related departmental activity which will be discussed separately in this report. developing projections for the FY 21 budget. FY 20 ended the year with a General Fund shortfall of $21 million, requiring the City to dip into both its operating and emergency reserves, something that had not been done in a very long time. For FY 21, the City was facing a projected $30 million structural shortfall and adopted a budget with both structural and one-time solutions, including savings from employee furloughs and an estimate of up to $8 million additional drawdown of reserves for both structural and one-time needs.

At the beginning of calendar year 2021, the City received news of federal and other grants that became the basis of the Long Beach Recovery Act , initially presented to the City Council in March 2021. This plan provided funds to eliminate the employee furloughs for the second half of the year, make up for lost revenues, and cover any FY 21 and FY 22 shortfalls (in addition to providing significant funds to invest into economic recovery and community health for businesses and residents).

In contrast to the originally anticipated budgeted shortfall, General Fund is ending FY 21 with an operating surplus of approximately $2.2 million. This is a small improvement from the previous mid- year projection that had estimated a surplus of approximately $0.5 million. For perspective, the level of projection accuracy being analyzed here represents a very small percentage of the General Fund budget. A swing in projections of $1 million is less than one-fourth of one percent of the budget.

While there were some revenue streams that underperformed and were impacted by the pandemic, major revenue sources, including Sales and Use Tax, Property Tax, Cannabis Business License Tax, and Oil revenues, performed better than budgeted and contributed significantly to the positive bottom line. On the expenditure side, department al expenditures were collectively less than budget. Other uses still include planned and required reservations, including the Charter -required Measure B stabilization fund and the Court-required set aside for the Measure M litigation.

The FY 21 General Fund and Uplands Oil Fund sources and uses are summarized in the following Table 1.

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February 8, 2022

FY 21 General Fund sources total $694.7 million, comprised of $652.7 million in revenue, which includes some of the revenues made available through the LBRA to recover revenues that were lost as a result of the pandemic, strengthening the City’s fiscal standing and resulting in the elimination of employee furloughs for hal f the year . $41.9 million in “other sources” are largely made up of the release of reserves for one- time expenditure purposes that were authorized (budgeted) in FY 21, including the release of carryover funds for unspent State Coronavirus Aid, Relief, and Economic Security (CARES) Act for Community Support and Business Recovery and Resiliency , and a release of reserves for liabilities no longer needed for their original purpose to offset a required transfer to the Housing Authority Fund Group to respond to an audit finding (additional details are provided in the fiscal impact section at the end of the report).

FY 21 uses total $692.5 million, comprised of $6 29.6 million in expenditures (excluding LBRA-related expenditures) and $47.9 million in other uses, such as reservations of funds for roll over of previously authorized one -time expenditures , Council District Priority funding, and funds required to be set aside for liabilities such as the Measure M litigation.

Additional information on other sources and other uses are provided later in the report.

Measure A funds are reviewed and appropriated separately from other General Fund monies. As a result, they are not included in the General Fund funds available calculation in the table above and instead are discussed in a separate Measure A section later in this report. Additionally, revenues received from the American Rescue Plan Act as part of the Long Beach Recovery Act , as well as related departmental expen ditures, are excluded from the figures above and are reported and discussed in a separate section in this report.

FY 21 Uplands Fund sources and uses are both $12.7 million, with the revenue including $1.5 million transferred from the General Fund made available through the LBRA (Securing our City’s Future) to cover pandemic related revenue losses. In FY 20, with oil revenues impacted by the pandemic, the annual set aside for the cost of future oil well abandonment was not done. In FY 21, however, the City was able to fund both FY 20 and FY 21 costs, reflected in the $2.9 million other uses.

General Fund Reserves

The funds available in the General Fund described above are in addition to General Fund Operating and Emergency Reserves. At the end of FY 20, the City utilized funds from the Operating and Emergency Reserves to address the shortfall that developed suddenly in the second half of the fiscal year due to the pandemic -induced recession. The funds made available through LBRA under the category of Securi ng our City’s Future have allowed the City to recover revenue that was lost due to the pandemic. As a result, at the end of FY 21, the City was able to strengthen our reserve status with the Operating Reserve (inclusive of the Measure B Stabilization Fund Reserve) at $14.9 million and the Emergency Reserve at $47.8 million. The Operating Reserve, at $14.9 million, is 2. 6 percent of normal operating expenditures, which is within the policy required range of 2 to 7 percent. The Emergency Reserve, at $47.8 million, is 8.5 percent of normal operating expenditures and is below the target level o f 10 percent but above the minimum of 8 percent. The Uplands Oil Fund has an operating reserve of $500,000 and an oil fluctuation reserve of $2.9 million.

HONORABLE MAYOR AND CITY COUNCIL
February 8, 2022

Required Measure M Litigation Escrow and Reserves

In December 2021, an appellate court ruled against the City in a lawsuit challenging the legality of the City’s Measure M charter amendment, which was approved by voters in 2018 to continue the long-standing practice of transferring surplus City utility revenues to the City’s General Fund in order to support services for Long Beach residents.

The City disagrees with this ruling and is appealing to the California Supreme Court. Staff anticipates the Supreme Court’s response sometime in the spring of 2022. If the Supreme Court takes the City’s case, the City will be required to continue to set aside the annual transfer subject to litigation (approximately $9 million) into escrow each year while the case is being reviewed, and the City will need to set aside these funds for both FY 22 and FY 23 (a total of approximately $18 million). If the Supreme Court does not take the case, then the appellate court ruling will be final, and the City will need to remit back to the Water Department the funds that have already been previously escrowed (a total of $9 million made up of $3 million escrowed in FY 20 and $6 million in FY 21) within 30 days of the Supreme Court’s response. Additionally, the City will need to repay within 180 days $24 million for past transfers and resolve a $9 million ongoing structural shortfall impact in the General Fund, beginning with FY 2 4, assuming FY 23 can be resolved with one- time funds.

Separate from the Operating and Emergency Reserves, City staff have been evaluating other reserves that were previously set aside for other obligations and liabilities that might be able to be re- designated to address the Measure M litigation. These include funds that were previously deposited into escrow for the McWilliams v. Long Beach settlement – a class action lawsuit on the City’s telephone users tax. At the end of FY 21, all claims related to this case have been received and refunds paid, and funds not used were reverted back to the City ; the refund received in FY 21 along with existing reser ves of $2.3 million the City had for this purpose results in a reserve of $6.1 million no longer needed for the original purpose . Other reserves that may be re- designated include $1 million of reserves no longer needed for escheatment of unclaimed funds; and $2.2 million of reserves no longer needed that were associated with the 2005 earthquake bonds.

These reserves are available to be placed in the court-required Measure M escrow for FY 22 and FY 23.

If the Supreme Court decides to hear the City’s Measure M case, the City Attorney’s Office believes that a final ruling would be at least one year away, perhaps even two. In the meantime, the re-designated reserves noted immediately above, along with additional reserves set aside in FY 21 to address lawsuit requirements, total to $15.7 million and are sufficient to cover the required escrow in FY 22 and partially cover the requirement for FY 23. It is recommen ded that the first priori ty of any improved projections in FY 22 should go to meet the remaining escrow requirements (approximately $2.3 million) for FY

23. However, if the Supreme Court does not hear the case or if it does but the City ultimately loses, then $24 million of one-times will need to be identified along with addressing a $9 million structural hit to the General Fund, beginning with FY 24. Staff are evaluating options in this scenario including a possible judgement bond and will report back to the City Council with options depending on the outcomes.

HONORABLE MAYOR AND CITY COUNCIL
February 8, 2022

Recommendations for the Use of Funds Available in the General Funds

As previously noted, the FY 21 ending funds available is projected to be $2. 2 million for the General Fund. The proposed uses for the funds available are shown in the following Table 2, with an explanation for each of the proposed year-end uses following the table.

Recommendations for uses of Funds Available include the following one-time uses:

• Set aside five percent of funds available for unfunded liabilities to comply with the City Council’s adopted financial policy. This includes $109,649 from the General Fund.
• Carryover of $480,164 in General Fund savings from the Legislative Department, which, by practice, will be allocated to supplement each respective Council District’s one -time District Priority Funds, in accordance with the Legislative Department Procedures for Purchases, Payments, and Personnel Transactions document of December 10, 2020.
• Enhancement for the City Manager’s Department of $270,000 to provide funding for Beach Streets University that will take place in FY 22, transforming 4.1 miles of eastern Long Beach along Atherton Street adjacent to California State University Long Beach, Bellflower Boulevard, Los Coyotes Diagonal and Spring Street into a General Fund Uplands
Ending Funds Available (9/30/21) 2.19$ -$
5% Unfunded Liability Policy (0.11)$
City Council Offices Budget Savings for Council District Priority Funds (Divide by Nine)
(0.48)
Beach Streets University (0.27)
Public Fireworks Show* (0.08)
COVID-19 Memorial* (0.55)
Cannabis Equity Program Technology Platform (0.08)
Commission on Women and Girls Engagement Outreach (0.03) Communications on Homelessness (0.10)
Covid-19 Response and Critical Needs Reserve (0.10)
Accessory Dwelling Unit (ADU) Streamlining (0.03)
Food Truck Study additional funding (0.03)
Street Vendor Ordinance Study Implementation (0.10)
Violence Prevention, Marketing, and Youth Mentorship Program (0.09) Supplemental Homeless Rapid Response Funds (0.06)
Mental Health Services Infrastructure Feasibility Study (0.10) Ending Funds Available (9/30/21) After Recommended Uses 0.00 - * Total funding for the Public Fireworks Show from FY 21 surplus will be $165,000, with half coming from General Fund and the other half from the Tidelands Operating Fund. Total funding for the COVID-19 Memorial from FY 21 surplus will be $750,000, with $550,000 funding coming from General Fund and $200,000 from Measure A surplus funds Table 2: Recommended Uses of Funds Available
for General Fund and Uplands Oil Fund
(in $ millions)

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February 8, 2022

car-free corridor for residents and visitors to walk, bike and shop. The funds will be used for public outreach, pre-event planning and event day costs. • Enhancement for the City Manager Department of $82,750 (in addition to $82,750 funding from Tidelands Operating Fund for a total of $165,500) to support the FY 22 Fourth of July downtown fireworks show display only. Funding includes Police and Fire staffing in immediate area only, fencing rentals, security, CEQA fees, barge rental , and fireworks. Funding does not include citywide Fourth of Jul y staffing or fireworks notifications and safety campaigns. • Enhancement for the Public Works’s Department of $550,000 (in addition to $200,000 from Measure A surplus for a total of $750,000 for the project from FY 21 year end funds) to support the visioning, design and construction process for a COVID-19 memorial in Long Beach per the direction of the City Council on May 11, 2021. In addition to $100,000 that was previously allocated, total funding for the COVID-19 memorial is $850,000.
• Enhancement for the City Manager Department of $75,000 for a technology solution to support the Cannabis Social Equity Program. The technology solution will be used to house Equity Program data including equity applications, direct grant applications, and direct technical assistance activities. • Enhancement for the City Manager’s Department of $25 ,000 to support establish an Advisory Team and community engagement activities related to the creation of a Commission on Women and Girls as directed by the City Council on September 7, 2021.
• Enhancement for the City Manager’s Department of $100,000 to support t he development of a comprehensive communications plan to support the efforts across all City Departments that are working to address homeless related matters.

This plan will assist people in accessing housing and services, raise awareness and build empathy across the Cit y, and engage community members and businesses about all things related to our service system and available resources. • Enhancement for the City Manager’s Department of $100,000 to support urgent COVID-19 response and critical needs.
• Enhancement for the Development Services Department of $30,000 to identify mechanisms that further streamline the Accessory Dwelling Unit (ADU) permitting processes and construction costs through tools such as pre-approved dwelling unit plans.
• Enhancement for the Development Services Department of $30,000 in partnership with a multi-department task force that will establish a food truck vending program, including analysis of existing conditions, stakeholder outreach , and development of a Mobile Food Truck Ordinance.
• Enhancement for the Development Services Department of $100,000 in partnership with a multi-department task force that will establish a Sidewalk Vendor Ordinance, including an existing condition assessment, audit of the municipal and other relevant code provisions, case study of similar California jurisdictions that

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have established sidewalk vendor programs, stakeholder interviews , and the development of a Sidewalk Vendor Ordinance.
• Enhancement for the Health and Human Services D epartment of $85,000 to support the Racial Reconciliation Plan’s violence prevention efforts via the Long Beach Advancing Peace Initiative (LBAP), a Black Health Equity social media marketing campaign to engage disenfranchised Black residents in healthy conversations, and the implementation of a youth mentorship program focused on equipping youth with life-skills and guidance in decision-making. • Enhancement for the Health and Human Services Department of $55,412 to support the rapid response efforts of the City’s Interdepartmental Team to continue to connect people who are experiencing homelessness to permanent housing solutions, while simultaneously addressing cleanliness issues across the City that are related to homeless encampments and public health related issues. • Enhancement for the Health and Human Services Department of $100,000 for outside support and technical expertise to conduct a feasibility study on establishing a more robust infrastructure for mental health services in collaboration and alignment with local mental health providers in Long Beach and the County of Los Angeles.

These recommendations will be included in the FY 22 First Budget Adjustment Report for the City Council’s formal consideration and appropriation authority.

The following sections provide additional information on General Fund sources and uses.

General Fund – Sources of Funds

For FY 21, $652.7 million in General Fund revenue was received, which was higher than the Adjusted FY 21 Budget by $65.1 million. A significant portion of the revenues received over the budget include unbudgeted revenues that will be reserved or offset for specific purposes including: $3.8 million of funds received back by the City no longer needed for the settlement of the McWilliams litigation (telephone Utility Users Tax); $1.7 million to be reserved for future potential FEMA reimbursement related costs; and $27 million in Long Beach Recovery Act funding to recover revenue loss due to the pandemic , which has strengthened the City’s fiscal standing, reserves, and allowed for the elimination of employee furloughs for half of the year. Total funds received through the American Rescue Plan Act are not reflected in these revenue figures as they are accounted for and described separately in the LBRA section later in this report. While some revenue streams, such as Transient Occupancy Tax, are recovering more slowly than budgeted, other key revenue sources significantly outperformed the FY 21 b udget. These revenue sources include property, sales and use, cannabis business license, and utility users taxes, as well as transfers from the Uplands Oil and Gas Fund Groups. Some of these revenues, such as property and sales taxes, ended the year at or around the form er projections reported as part of the mid-year FY 21 Budget Performance Report; other key revenues performed even better than the mid-year projections, which were largely based on analysis and data as of May 31, 2021.

HONORABLE MAYOR AND CITY COUNCIL
February 8, 2022

Key Revenues that Underperformed

• Transient Occupancy Tax (TOT), including revenues generated from the additional one percent from Measure B, ended the year at $13.6 million, which is $0.8 million higher than projected. While higher than mid-year projections, revenues were still $1.9 million (or 12 percent) under the original budget forecast, which was already set lower to account for the pandemic. When the budget was developed, it was projected that TOT activity would begin to partially recover at the start of FY 21, assuming conventions and business travel would resume (albeit limited) as pandemic-related travel and social distancing restrictions were lifted. However, the recovery towards pre-pandemic levels did not begin until mid- year FY 21. Based on TOT performance during the last six months of FY 21, TOT revenues are trending much closer to average pre-pandemic levels. Despite improvement, TOT continues to be an extremely volatile revenue source and is heavily dependent on conventions and business travel. Staff will continue to closely monitor and evaluate

performance as more information is made available.

• Other revenue streams across various City departments came in under budget by a total of $8.6 million (or 34 percent). This amount is comprised of multiple revenue sources that have been impacted heavily by the pandemic , including $1 million from reduced demand for police services at special events that had to be cancelled; $2.9 million for various fees and charges such as parks programs and facility rentals that were also cancelled; and $2.8 million of utility late fees that were suspended in order to provide financial relief to residents and businesses during the pandemic.

Key Revenues That Performed Better than Anticipated

• Property tax revenue ended the year $9.3 million (or 7 percent) higher than budget, with a significant portion of this c oming from one- time sources . Better than anticipated FY 21 revenues are from the City’s share of property tax revenues from the former redevelopment agency (RDA) project areas. Higher revenues include $6.7 million from one-time prior year adjustments in the former RDA project areas.

In addition to one- time revenues received in FY 21, actual revenues also reflect positive sale price trends and increases to assessed valuations generated by new development projects and improvements.

• Sales and Use Tax (non-Measure A) ended the year at $75.0 million, which is $8.2 million (or 12 percent) higher than budget. Actual year -end revenues align with prior mid-year projections which accurately assumed that the strong performance during the first three quarters o f the City ’s fiscal year would be sustained in the fourth quarter. In general, the FY 21 budget assumed that the City would recover more slowly from pandemic -related losses, with full recovery to pre- pandemic levels in FY 22. Higher revenues are due to inc reases across several sales tax categories including Autos & Transportation and Food and Drugs, which includes much higher cannabis sales. FY 21 actuals also include one-time use tax revenues from various development projects occurring in the City. Finally, the City continues to receive a steady increase in its share of countywide pool revenues, driven by

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February 8, 2022

the increase in online sales tax activity and AB 147, which ensured sales and use tax collection from online sales.

• Cannabis business licens e tax and fee revenues were $12.1 million, which exceeded the budgeted amount by $4.1 million (or 52 percent) and excludes fees for the cannabis equity program. The better than budgeted actuals are based on higher average dispensary tax payments due to a s urge in cannabis sales first experienced in FY 20 during the pandemic. At the time of budget development, due to uncertainty surrounding the cannabis market and the stability of revenues, the FY 21 budget assumed that only a portion of increased FY 20 sales would continue into the next fiscal year. The FY 22 budget does assume that revenues will stabilize at a greater level, albeit not quite to the level as experienced in FY 21.

Further, as part of the Adopted FY 21 budget actions, the City Council approved the extension of business hours for dispensaries by two hours. Currently, there is no information available for an estimate of the impact of the increased operating hours on sales and tax revenues.

• Revenues generated from the 5 percent utility users tax (UUT) on usage of telephone, electric, gas and water exceeded budget by $3.6 million (or 10 percent) in FY 21. With gas and telephone UUT revenues close to budgeted amounts, better than budget revenues are attributed to overages in electrical and water UUT.

In both cases, the FY 21 budget projection was left relatively flat from FY 20 mainly due to the unknown pandemic -related impacts including delayed payments, business closures, UUT generated from oil operations, and did not include growth assumptions for consumption and rate changes. Additionally, e lectric UUT revenues included payments due in FY 20 but remitted in FY 21.

• FY 21 year -end revenues included an increased one- time transfer from the Ga s Fund. Due to better than expected performance, the Gas Fund Group was able to increase the FY 21 transfer to the General Fund Group from the budgeted $12 million to $13.5 million, which is within the City Charter -authorized level of 12 percent of total gross revenues.

• The General Fund Group receives an annual transfer from the Uplands Oil Fund of net oil revenue from land-based oil wells in which the City has an interest. In FY 21, the transfer was $7.3 million which is $2.6 million (or 55 percent) higher than the budget. The FY 21 budget was developed following the unprecedented drop in oil prices in FY 20. Due to uncertainty, the budget assumed the price of oil at $35 per barrel. However, oil prices recovered with the actual price in FY 21 averaging $59 per barrel, which allowed for higher than budgeted net transfers to the General Fund Group. Less than 50 percent of the revenue for Uplands is associated with the sale of oil. Over half the revenue received by the City is from administrative overhead fees associated with Tidelands oil production.

Attachment B provides a breakdown of the top 40 General Fund revenue performance by source, with key variances and notable issues identified in the footnotes.

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February 8, 2022

Other Sources

Other Sources is about $41.9 million in FY 2 1. The majority of these other sources are comprised of the release of reserves set aside in FY 20 to fund City Council -approved expenditures that were anticipated to occur in FY 2 1, such as the FY 20 encumbrances to be paid in FY 21, the release of carryover of one-time funds from previous allocations that were not completed, including the carryover for Council District priority funds, and most significantly, $19.5 million of the $25.0 million carryover for CARES Act fundin g.

Also included in Other Sources is the release of $7.8 million in Measure A reserves planned for use in FY 21.

General Fund – Uses of Funds

Expenditures by Department

General Fund expenditures totaled $629.6 million or 95 percent of the Adjusted Budget (excluding costs associated with LBRA ). However, this amount includes some savings due to City Council -authorized one- time projects that have not yet been spent and encumbrances that will carry over to FY 21 (including Measure A non-infrastructure one- times and Council District Priority funding balance s). Including these commitments, General Fund spending came in at 98 percent of the Adjusted Budget.

The Adjusted Budget amount of $660.2 million (excluding budget associated with the LBRA) includes the budget adjustments being requested in this report to align budget with actual spending. Except for the Economic Development, City Manager, and Health and Human Services Department s, all General Fund departments ended the year within appropriation when comparing actuals and obligations against the appropriation budget adjusted with offsetting sources . The Economic Development and Health and Human Services Departments require appropriation increases in this report to cover expenses above budget. The City Manager’s Department incurred unfunded costs that required budget adjustments, already approved by the City Council on December 7, 2021, in the Third Budget Adjustment Letter that drew down on budgetary funds available. Below are descriptions of those specific appropriation adjustment needs that did not have specific offsets:

• The Economic Development Department exceeded budget by approximately $760,000 due to unfunded costs associated with the maintenance or beautification of City-owned properties including the Armory , and a small transfer of ineligible grant-related expenses from the Community Development Grants Fund to the General Fund. Budget adjustments for these items and other technical adjustments needed are requested later in this report.

• The Health and Human Services Department exceeded budget by approximately $2.1 million due to the transfer of funds to the Housing Authority Fund to repay funds that have been deemed as unallowable costs by an audit. This cost will be offset by a release of reserves for liabilities no longer needed for their original purpose. The City has made substantial progress on corrective actions required

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by the audit in the indirect cost plan allocation methodology to avoid such future repayments.

• The City Manager Department exceeded budget by approximately $62,000, when excluding appropriation increases that were approved without specific offsets. The Department incurred a number of unfunded costs in FY 21 that the City Council approved budget adjustments for that drew down on funds available as an offset .

These adjustments included unbudgeted compensation to members of Charter Commissions and City Council appointed committee members, Intergovernmental Affairs membership dues, and a portion of the Management Assist ants Program.

The unfunded items are being evaluated for resolution as part of the FY 23 Budget Development process.

There were also departments that realized note- worthy savings compared to their budgets.

• The Police Department came in $3.3 million under budget (approximately 1 percent) largely due to attrition savings in both sworn and civilian positions. These savings are a normal part of operations, but more was generated this year due to higher turnover and retirements. Future year vacancies are anticipated to be mitigated with planned police academy recruitment efforts for FY 22. Included in their savings, the Department was able to cover costs of key needs related to completing the Public Safety Parking Garage, the Crime Lab and Property Warehouse Leases, and funding for vehicles for the newly converted community service assistants to handle priority-three calls. Projections indicate that there will be sufficient attrition savings to offset costs for the back-to-back Police Academies scheduled for FY 22 and no FY 21 funds need to be set aside for this purpose.

• The City Clerk Department's expenditures ended the year approximately $1 million under budget (approximately 20 percent ) due to overestimated election costs provided by LA County and general savings from not hosting in- person civic engagements for elections and redistricting , in compliance with the COVID-19 pandemic health orders.

• The Parks, Recreation and Marine Department expenditures ended the year $1.4 million under budget (approximately 4 percent ) due to realized savings in the Community Recreation Services Bureau from program cancellations related to the COVID-19 pandemic and not encumbering and carrying over one-times for water budget that have been absorbed for the past couple of years. The Department was able to absorb other unfunded costs from Animal Care Services and citywide park water needs through the one-time savings in community programs. With programs expected to resume to normal status in FY 22 and beyond, the department will monitor costs , including cost for water, for potential adjustments in FY 22 and evaluate any necessary changes through the FY 23 budget development process.

HONORABLE MAYOR AND CITY COUNCIL
February 8, 2022

For the Legislative Department, in accordance with normal budgetary practice that provides for utilization of year end Council District operating surplus for future District Priority Funds, $480,164 is included for reappropriation to Council District Priority Funding. The Mayor’s Office and the Third Council District were overbudget by $111,909 and $2,539, respectively. In accordance with normal budgetary practice, these overages will be recovered through equivalent operating budget decreases to these two operations in the FY 22 operating budget.

Attachment C provides a breakdown of General Fund expenditure performance by department. Notable departmental variances are identified in the footnotes to this attachment.

Other Uses

FY 21 O ther Uses of funds, not -related to Measure A, total s $47.9 million and is comprised of various reserves, with the most significant being the $22.4 million made possible by LBRA (Securing our City’s Future) to compensate for pandemic -related revenue loss . Other Uses of funds includes a $7.9 million set aside for reserves for required one-time needs such as the Measure M litigation escrow payments , partially funded by unclaimed funds returned to the City related to a settlement agreement from a class action lawsuit on the City’s telephone users tax; $1.7 million set aside from increased FEMA reimbursements resulting from a change in policy to cover potential return of funds that may result from future FEMA audits ; Measure B stabilization set asides for Measure MA and Measure B -TOT; set-asides for the roll-over of Council Districts’ operating surplus to augment Council District Priorit y Funding in accordance with normal budgetary practice; previous City Council- approved one- times not fully expended that will be requested for re-appropriation in the FY 22 First Budget Adjustment Report; and a reserve of $1.3 million as directed by the City Council on August 24, 2021 as part of the Adopted FY 22 Budget for investments in structural and one-time additions to the General Fund.

Measure A -related other uses total $14.9 million and include the reservation of approximately $2 million of planned funding to be set aside to complete the out-year plan; the set aside of $ 10 million to back out the impact of any Measure A surplus from the analysis of the General Fund; $0.7 million for the Measure B stabilization fund for Measure A; $2.2 million for approved one-times not fully spent in FY 21 for re-appropriation in FY 22; and $0.8 million reservation to support the infrastructure funding necessary to be in compliance with legal ADA obligations related to sidewalk and curb requirements.

Additional information on Measure A is provided in the next section.

Measure A Revenues and Expenditures

The Adopted FY 21 Budget initially projected Measure A revenues at $62. 7 million. The planned expenditures included the same level of uses to fund priority public safety maintenance and restorations, capital improvement projects, public safety related one- times, Community Hospital, the administration of the Measure A tax, set aside for the Measure B stabilization fund, and planned set aside for future projects to account for cash flow timing.

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February 8, 2022

The Adopted FY 21 Budget was developed in June 2020 during the beginning of the COVID-19 pandemic and economic recession, when there was limited d ata and much uncertainty as to the specific impact the pandemic would have on City revenues, including those from Measure A. Factoring in this uncertainty and working with the City’s sales tax consultants in looking at industry trends and projections, the FY 21 Measure A revenues budget of $62.7 million was an amount far lower than what had been previously projected for the fiscal year prior to the pandemic. For context, FY 20 Measure A revenues ended the year at $62.2 million, approximately $4 million lower than FY 19 actuals.

As reflected in Table 3 below, Measure A revenues ended the year at $73.5 million, $10.8 million higher than budgeted. Like sales and use tax, higher revenues are due to better than projected performance across several categories, including Autos and Transportation and Food and Drugs, as well as one- time use tax revenues from development projects occurring in the City. Additionally, Measure A revenues include higher than budgeted revenues from AB 147, which ensures that online retailers collect and remit Measure A along with Sales and Use Tax.

In terms of u ses, various mid- year budget adjustments approved by the City Council increased the total uses to approximately $72 million to account for FY 20 surplus funds that were allocated for FY 21 Measure A projects, projects supported by transfers from CIP funds such as the land acquisition of Fire Station 9 and a Fire Engineer Academy , and an allocation of $800,000 to support the infrastructure funding necessary to be in compliance with legal ADA obligations related to sidewalk and curb requirements. The Measure B reservation ended the year at $0.7 million to reflect the increase in Measure A revenues. Lastly, $2.2 million is being set aside for non-CIP projects that were approved but not fully expended in FY 21 and being carried over to FY 22.

Table 3 below provides a summary of the FY 21 Measure A sources and uses resulting in a year-end surplus of approximately $10.0 million.

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February 8, 2022

Recommendations for the Use of Funds Available in Measure A

The $ 10 million in excess of the previously allocated funds is recommended to be reserved and appropriated in FY 22 , largely to support key priority projects identified by the City Council as part of the FY 22 budget adoption night actions approved on August 24, 2021. The recommendations for uses of Measure A surplus include the following:

FY 22 Adopted Budget – Priority Projects

• Enhancement for the Parks, Recreation, and Marine Department of $200,000 for the funding needed to trim trees and identify potential hazards caused by the City's aging urban forest in the City's Parks.

• Enhancement for the Parks, Recreation, and Marine Department of $50,000 for completing the final findings and outreach of the North Long Beach pool feasibility study.

Adopted Adjusted/ETC Actuals
Sources
Measure A Revenue $ 62.69 $ 73.71 $ 73.49 Other Sources (Release of FY 20 Year End Reserve 1) 5.52 5.52 Other Sources (Transferred Back to Measure A from CIP 2) 2.91 2.91 Total Sources 62.69 82.14 81.92 Uses
Expenditures $ (60.08) $ (68.51) $ (66.27) Other Uses: Measure B Reservation (0.63) (0.74) (0.73) Other Uses: Reserve for FY21 one-time carryover 3 (2.16) Other Uses: FY21 Surplus reserved for ADA in FY 22 4 (0.80) (0.80) Other Uses: Reserve for approved Measure A plan out-years 5 (1.98) (1.98) (1.98) Total Uses (62.69) (72.03) (71.95) FY 21 Year-End Status $ 0.0 $ 10.12 $ 9.97 Table 3: FY 21 Measure A Budget and Year-End Performance (in millions) 1 Represents funding set aside at the end of FY 20 from year-end surplus of 5.28 million for Council approved new projects and $241,255 for carryover of one-time, non-CIP projects.
2 Represents funds transferred from Measure A CIP to General Fund where cost will be incurred - $165,600 for rent and utility costs for temporary Fire Station 9, $490,409 for Fire Engineer Academy, and $2.25 million for Fire Station 9 Land Acquisition. 3 In FY 21, a total of 2.16 mill of approved projects were not fully expended but are planned to be set aside to be reappropriated for in FY 22. This included budget for the purpose of tree trimming, irrigation pumps and Public Safety Motorola Radio debt payment support. 4 Reservation to support the infrastructure funding necessary to be in compliance with legal ADA obligations related to sidewalk and curb requirements, approved as part of the Adopted FY 22 Budget. 5 Reflects the planned reservation of funds set aside as per the approved ten-year Measure A plan. This allocation accounts for the timing of projected revenues and the project funding needs in the plan.

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• Enhancement for the Public Works Department of $150,000 for the funding needed for further restoration of the MLK Jr. Statue and MLK Park Area Improvements which include landscaping, irrigation, security and lighting needs.

• Enhancement for the Public Works Department of $ 1,000,000 for the funding needed to construct a replacement playground at Admiral Kidd Park. With additional funding to construct the playground expected through fundraising opportunities, this project is now fully funded.

• Enhancement for the Public Works Department of $200,000 for community outreach and design of an All Abilities (Universal) Playground at El Dorado Park.

• Enhancement for the Public Works Department of $200,000 for the funding for community outreach and design for a new playground at Houghton Park.

• Enhancement for the Public Works Department of $200,000 for the funding needed to develop community outreach and design for a new playground at Silverado Park.

• Enhancement for the Public Works Department of $1,500,000 for the funding needed for the El Dorado Duck Pond Rehabilitation Project , as indicated in the Council Letter approved by the City Council on December 7, 2021. This project may need more funding, dependent on potential grant funding.

• Enhancement for the Public Works Department of $150,000 for the funding needed to maintain the Bluff Park Historic Lamps (Phase III) including upgrades, maintenance, and installation of historic streetlamps.

• Enhancement for the Public Works Department of $1,250,000 for the funding needed for City Gateway Signage and Monument Sign on the 405 and 22 freeways.

• Enhancement for the Public Works Department of $200,000 for the funding needed for restoration of the Bixby Park Bandshell and further Bixby Park improvements.

This funding will augment the funding received from the State of California totaling $850,000 for further improvements at Bixby Park.

Other Priority Recommendations

• Enhancement for the Public Works’s Department of $550,000 (in addition to $200,000 from Measure A surplus for a total of $750,000 for the project from FY 21 year end funds) to support the visioning, design and construction process for a COVID-19 memorial in Long Beach per the direct ion of the City Council on May

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11, 2021. In addition to $100,000 that was previously allocated, total funding for the COVID-19 memorial is $850,000.

• Enhancement for the Fire Department of $250,000 to support Fire Academy Class 2022A, set to beg in February 2022. This additional funding is needed due to an increase in the number of Fire Recruits required to fill current and projected Firefighter vacancies, from 24 to 28 recruits.

• Enhancement for the Fire Department of $165,000 to support annual operating costs of the temporary site of Fire Station 9 which include monthly lease and utilities expenses.

• Enhancement for the Fire Department of $500,000 to fund the FY 22 Fire Engineer Academy and support personnel costs for the instructors and candidates as well as equipment and materials required for the Academy.

• Enhancement for the Health and Human Services Department of $250,000 to address the facility needs at the main health site located at 2525 Grand Avenue. Funding will be used to address ongoing issues and unfunded projects that may include, but are not limited to, roof replacement/repair, resolving the HVAC system controls and compressor issues, modifying offices to accommodate staff and meet safety standards, completing flooring replacement , or general appearance of the facility that will reduce ongoing maintenance costs. Additional funding to complete necessary projects is likely to be required.

• Enhancement for the Parks, Recreation, and Marine Department of $50,000 for the funding needed to facilitate the renaming , and fund general improvements of, the El Dorado Park West Senior Center to honor former Mayor Tom Clark.

• Enhancement for the Police Department of $1,500,000 to support upgrades at Police facilities to comply with State CLETS (California Law Enforcement Telecommunication Systems) regulatory mandates to secure an individual's personal identifying information and provide for uninterrupted radio communication.

• Enhancement for the Police Department of $549,792 to support facilities lease costs associated with the crime lab and new long -term property and evidence storage warehouse facilities.

• Enhancement for the Police Department of $200,000 to contribute toward the costs of repairing and upgrading citywide security cameras. Priority locations will be identified in coordination with the Public Works and Technology and Innovation Departments.

• Enhancement for the Public Works Department of $200,000 for the funding needed to rehabilitate various restrooms located throughout the City’s Parks.

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• Enhancement for the Public Works Department of $750,000 for the funding needed for Traffic Signal and Pedestrian Safety Improvements, citywide. This funding will be used to develop and install traffic and pedestrian safety improvements such as blinking beacons at crosswalks, improved crosswalk painting, improved lighting, and signal programming, among other measures.

• Enhancement for the Public Works Department of $252,497 for Measure A Project Reserves. Due to inflation and cost escalation, Public Works will set aside these funds to account for any unexpected Measure A funded project cost overruns.

These recommendations will be included in the FY 22 First Budget Adjustment Report for the City Council’s formal consideration, but the appropriation approval will be contingent upon the confirmation by the Measure A Citizens Advisory Committee that the proposed uses are in conformance with the intent of R esolutions No. RES -16-0018 and RES-16- 0017 prioritizing spending.

Long Beach Recovery Act

The Long Beach Recovery Act was initially approved by the City Council on March 16, 2021. LBRA programs fall under three categories: Economic Recovery, Healthy and Safe Community, and Securing our City’s Future. The Economic Recovery programs f ocus resources on residents and businesses most impacted by the pandemic to promote an effective and inclusive economic recovery that strengthens revenue generation and leverages consumer spending to stimulate lasting economic growth. The Healthy and Safe Communit y programs focus resources on addressing the underlying social determinants of health and prioritizing basic needs and the mental and physical health of community members most adversely impacted by the pandemic. The Securing our City’s Future category funds the restoration of City services by eliminating employee furloughs, helping the City weather the next financial crisis by replacing lost revenue and providing critical time for the City to develop financial and service strategies to address future projected significant operating budget shortfalls.

LBRA programs continue to evolve as additional funding sources and recovery needs are identified. The City Council approved a revised plan on August 24, 2021, and additional adjustments on December 7, 2021. The total of LBRA has grown from $235.5 million to $252.0 million as of the end of FY 21. The increase is due to revised funding amounts of existing grants and the addition of the Vaccination and Health Disparities Grants.

Attachment E details th e revised LBRA programs, sub- programs, and the associated allocation amounts. Attachment D provides the summary of FY 21 expenditures and revenues by department further described in the sections below.

LBRA Sources

LBRA is funded by various sources, including the General Fund, as a result of the City’s approach in using federal American Rescue Plan Act (ARPA) funds. Detailed information on the City’s approach in using ARPA funds can be found in the section below titled Indirect American Rescue Plan Act Funding for Long Beach Recovery Act.

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The table below provides detail on all funding sources supporting LBRA.

Table 4: Long Beach Recovery Act Funding Sources (in millions) Updated Sources as
of FY 21 Year-End
General Fund (American Rescue Plan Act-ARPA) $135.8
Airport Grant $15.1
Emergency Rental Assistance Program (ERAP) – Round 1 $30.2 Emergency Rental Assistance Program – Round 2 $21.2
Epidemiology and Laboratory Capacity Grant (ELC) $26.7
Health Disparities Grant $7.7
HUD Home-ARP (addressing homelessness) $10.2
Vaccination Grant $5.1
Total Funding Sources* $252.0
*Actual amounts received in FY 21 may vary depending on actual funding received.

In terms of actual revenues and grant funds received, $166.6 million was received in LBRA revenues in FY 21 – $71.8 million in the General Fund made possible by the indirect funding provided by ARPA and $94.8 million in other funds. A total of $16.4 milli on was received from the U.S. Department of Housing and Urban Development to support the Emergency Rental Assistance Program, and $6.5 million in grant revenues were received to support other LBRA programs.

LBRA Uses

LBRA programs continue to evolve as additional grants and other sources are identified.

The following table summarizes the updated budget and FY 21 expenditures by Program Category.

Table 5: Long Beach Recovery Act Program Categories (in millions)

Updated
Allocations as of FY
21 Year-End
Actuals as of FY 21
Year-End
Economic Recovery $63.7 $23.7* Healthy and Safe Community $112.6 Securing Our City’s Future $75.7 $33.7
Total Long Beach Recovery Act $252.0 $57.4
* As programs are being established in the system, t he split of actuals within the categories of Economic Recovery and Healthy and Safe Community is not available at this time but will be available in future reports.

In FY 21, a total of $ 23.7 million was expended in the Economic Recovery and Healthy and Safe Community programs, of which $0.8 million was in the General Fund and $22.9

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million in other funds. Two programs accounted for more than 90 percent of the total spending – the Emergency Rental Assistance Program ($16.4 million) and the Epidemiology and Laboratory Capacity for Prevention and Control of Emerging Infectious Diseases (ELC) Program ($5 million). For the General Fund, t he majority of the costs were associated with administration costs necessary to create and develop the 80 new LBRA programs and manage $252 million in LBRA funds, an amount larger than the budget of many California cities. To ensure the successful roll out of LBRA, the City has initiated a temporary, three-year staffing plan focused on retaining the necessary human resources, setting up financial processes and controls, and developing collective impact programs to support Long Beach’s recovery efforts. To manage this effort, a central management team has been assembled, and additional administrative and operational staff will be hired in phases as programs are rolled out. An allocation of approximately 16 percent will be applied to each program for administrative expenses to ensure the proper program development and implementation, and report coordination for compliance with funding requirements. Currently, as many program plans and accounts are still being established, the administrative expenses incurred in FY 21 have not yet been applied to programs, and thus the actual expenditure allocation by program category is not currently available. In future performance reports, expenditures will be detailed by category and program once all programs have been developed and the associated financial accounting structures have been established. Additional programmatic costs are anticipated in FY 22 as more programs become ready for implementation.

In FY 21, as approved as part of the Securing o ur City’s Future category, $33. 7 million was utilized for the uses listed below. An appropriation increase in the General Fund is necessary to facilitate the transfers to other funds and is requested later in this report.

• $13.2 million to replace lost revenue that caused the General Fund Operating Reserve to be drawn down by that same amount in FY 20
• $9.2 million to replace lost revenue that caused the Emergency Reserve to be drawn down by that same amount in FY 20
• $1.5 million to replace the Uplands Oil Fund pandemic related revenue loss, making it possible to fund the annual set aside for future oil well abandonment costs
• $5.2 million to replace lost revenue of the Special Advertising and Promotions Fund due to the pandemic
• $4.5 million to cover General Fund costs due to the eliminat ion of the planned employee furloughs for the second half of FY 21

Indirect American Rescue Plan Act Funding for Long Beach Recovery Act

The U.S. Department of Treasury (U.S. Treasury) has adopted a Final Rule for the Coronavirus State and Local Fiscal Recovery Funds (SLFRF), established under ARPA, which governs the eligible uses of ARPA funds. This rule allows ARPA funding to be used to provide and maintain current government services (e.g., provision of police and other public safety services) up to the amount of the City’s calculated revenue loss due

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to the pandemic. In compliance with the Final Rule, the City’s approach will be to maintain existing, eligible City services (specifically police services) for both FY 21 and FY 22. The ARPA funding provided to the City thereby offsets General Fund monies, which are then used to deliver the Council -approved programs for the LBRA. As a result, the City’s reporting to the U.S. Treasury will show the majority of ARPA funds as being used to provide government services, while the City’s LBRA reports will conti nue to show the programs promised to residents and businesses. This funding allocation method reduces the substanti al administrative costs associated with SLFRF compliance and reporting requirements, and substantially reduces any City grant compliance ris k that could result in the U.S. Treasury’s recoupment of ARPA funds.

Other Funds

This section highlights key information on select funds. Attachment A provides a breakdown of citywide expenditures by fund for all of the 35 expenditure budgetary fund groups.

Civic Center Fund Group

The Civic Center Fund Group is used to maintain, improve, and operate the Civic Center complex, which includes City Hall, Billie Jean King Main Library, Fire Station 1, Police Headquarters, Broadway Parking Garage, the new Public Safety Parking Garage, and Lincoln Park. The ongoing revenue resources to this fund include charges from departments occupying the Civic Center facilities.

FY 21 costs include unbudgeted expenses from increased security provided by Johnson Controls, Inc. (JCI, the City Hall and Main Library facilities operator), security cameras for Old City Hall, and the amended Memorandum of Understanding (MOU) with the Port. The MOU with the Port was approved on January 6, 2020, which included costs for FY 19, FY 20, and FY 21. These costs include payment to the Port for unbudgeted easement, parking facility, and data room costs located in the Port Building. The total costs paid to the Port in FY 20 and FY 21 for the data room, parking facility, and easement total $1.9 million. Revenue to offset these expenses includes $373,500 received from the Port and $895,600 from the Department of Technology and Innovation. Additionally, Civic Center citywide expenses for overhead costs were higher than budgeted by $671,499 in FY 21.

Currently, the fund is projected to be in a negative budgetary funds available status of approximately $7.6 million, but increased interdepartmental charges in FY 22 and FY 23 (mostly borne by cost increases to the General Fund) and a future payment of an accounts receivable by Plenary are expected to eventually bring the fund back into balance.

Gas Fund Group

The Gas Fund Group provides full natural gas utility services to residential and commercial customers in Long Beach and Signal Hill. In FY 21, the Gas Fund spent $9 million on gas pipeline capital improvements, which was lower due to COVID restrictions.

Revenues from gas operations were up 10 percent compared to FY 20. This increase is attributed to continued strong demand due to cooler weather. Due to above expected

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revenue performance, the Gas Fund Group was able to increase the FY 21 transfer to the General Fund Group from the budgeted $12.0 million to $13.5 million. The additional $1.45 million transfer to the General Fund and was offset by additional Gas Fund revenues and is within the City Charter-authorized level of 12 percent.

Health Fund Group

The Health Fund Group accounts for revenues and expenditures associated with Federal, State, local and private grants, health permits, and other fees. In FY 21, the Fund continued to experience an influx of COVID -19 response grant dollars from various federal and State agencies for direct COVID-19 response, recovery and resiliency efforts, supplementing existing budget used to support programs focused on retention of existing services which promote health and wellness and provide protection from disease and injury. Since the City’s declaration of a local emer gency on March 10, 2020, the Health and Human Services Department (Health Department) has reallocated and added surge staffing of approximately 248 people across the department to respond to the COVID-19 pandemic within the Health Department, at the Emergency Operations Center (EOC), and at the Joint Information Center (JIC). Health Department staff have mobilized to lead and provide support for every facet of the City’s emergency response , including the Call Center Infoline, testing, vaccination, surveillance and site investigations, managing a 24- bed quarantine and isolation facility, temporary congregate homeless shelters, a 133- room Project Roomkey motel, and liaising with the State, County and other public health agencies, among many other responsibilities to mitigate the threat of the virus and ensure the health and safety of the Long Beach community.

The COVID-19 pandemic has adversely impacted and further strained City coffers in the attempt to respond to this public health crisis . Fortunately, federal relief by way of the Coronavirus Aid, Relief, and Economic Security (CARES) Act and American Rescue Plan are helping to ease some of the costs resulting from COVID -19. Federal funds awarded to the City include additional funding from the Centers for Disease Control (CDC) to enhance detection of COVID -19. The City will receive $26.7 million of pass- through funding from the CDC to the County to increase the City’s capacity to provide testing, surveillance and contact tracing, purchase test kits, and conduct laboratory testing and services. Also, the CDC provided direct funding to the City to focus on health and wellness impacts among populations most impacted by COVID -19, including race/ethnic communities and those living in poverty. The City was awarded $7.7 million to: (1) develop new mitigation and prevention resources/services to reduce COVID-19 related disparities among high -risk populations through collaborations with critical partners that have expertise implementing culturally affirming programs, (2) improve data collection and data infrastructure to ensure data modernization, and (3) e xpand infrastructure support to enhance health equity among communities that are higher risk and underserved. The City also received $5.3 million from the California Department of Public Health Immunization Branch to continue to assist local health departments in preventing and controlling vaccine-preventable disease including but not limited to COVID-19.

The Department of Housing and Urban Development (HUD) awarded funds to prevent, prepare for, and respond to the coronavirus among individuals and families experiencing homelessness. In the first round of funding, the City received $1.8 million and in the

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second round the City received $13.5 million, for a total of $15.3 million. Funding from the first round was primarily used for the operations of the shelters erected for COVID -19 response and prevention, while the second round of funding will be used to respond to COVID-19, including funding the continuation of non- congregate sheltering, outreach, prevention, and rapid rehousing. The American Rescue Plan Act (ARPA) administered through HUD’s HOME Investment Partnership Program (HOME) brought additional funding to assist individuals and families who are experiencing homelessness, at risk of homelessness, and other vulnerable populations. The City received $10.2 million through this legislation. Funding will be used for supportive services which will include the purchase and implementation of two Mobile Outreach Stations, operational costs of the REACH program, and the purchase of Modular Shelter Units. The funding will also go to emergency shelter services , which will entail intensive case management services assisting individuals and families eligible for HUD’s Emergency Housing Vouchers.

The City was awarded nearly $16.7 million for Project Homekey, a Statewide program which seeks to purchase and rehabilitate housing including hotels, motels, vacant apartment buildings and other properties , and convert them into permanent, long -term housing for people experiencing or at risk of experiencing homelessness. The City purchased the property located at 1725 Long Beach Boulevard in November 2020 and selected the Illumination Foundation to manage the on-site operations in February 2021.

The facility is operating as interim housing while the City identifies additional funds for full conversion to permanent supportive housing. This project is filling a crucial gap by offering pathways to permanent housing for more people experiencing homelessness.

On June 29, 2020, Assembly Bill 83 was signed into law by Governor Newsom, authorizing funding for the Homeless Housing, Assistance and Prevention Round 2 (HHAP-2) program. HHAP -2 is a $300 million block grant program designed to assist people experiencing homelessness to move into safe, stable housing, with a focus on rehousing individuals currently living in Project Roomkey (PRK) sites. Total funding award to the City was in the amount of $3.3 million. This funding will be used to operate the City’s Youth Shelter and to support the development and operation of the City’s new Navigation Center. Additionally, funding will support the hiring of o utreach workers who will be stationed at the City’s Main and branch libraries to provide individuals with resources and linkages to services.

Although short term, one-time funding opportunities became available as a result of the pandemic, the redirection of efforts have made it difficult to provide non- COVID related grant funded services and to maximize grant reimbursement for non- COVID related activities. This may put some future funding awards that are based on FY 21 performance at risk. Additionally, the Health Fund Group’s permits and fees revenue base is negatively impacted by pandemic-related temporary businesses closures due to the Safer-at-Home Order that was lifted as of June 15, 2021. A significant draw down on cash did occur in the fund during FY 20 and FY 21 but reimbursements are anticipated that will restore the funds, resulting in positive budgetary funds available. An estimated $44 million in reimbursements is expected from FEMA and other state and local grantor agencies.

While internal stressors such as growing capital infrastructure needs, rising technology and benefit costs, and increased restrictions placed on grants put pressure on the fund’s

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resilience, staff continues to work to identify strategies to address these ongoing challenges to ensure services levels are maintained.

Insurance Fund Group

The Insurance Fund Group is an Internal Service Fund that accounts for and finances all risk management-related and insurance activities citywide. The City uses self -insurance and purchases excess insurance coverage in the open market to protect against large losses. The fund is primarily supported through charges (premiums) to City departments and funds based on overhead rates and allocation of risk management costs, recovery fees, and reimbursements received on claims expense and other expenditures.

The Worker’s Compensation program, as required by law, offers health and lost wage benefits to employees at no cost if an employee is injured or becomes ill due to job related issues. The charges have increased from prior years due to projected increased costs based on the most recent actuarial study. This amount is being recouped by charges of premiums to departments. FY 21 began with $15.5 million in budgetary funds available for the Worker’s Compensation Fund and gained a surplus of $2.1 million for the year.

City staff will be evaluating the financial status of the fund and taking the budgetary funds available into consideration when determining future adjustments to departmental collection rates.

The General Liability program accounts for the City’s miscellaneous insurance, settlements, judgements, and defense for all liability related activities. These charges have increased from prior years due to projected increased costs based on the most recent actuarial study. General Liability costs for settlements and judgements increas ed sharply prior to the pandemic , resulting in the depletion of cash in the General Liability Insurance Fund. Large settlements and losses were in multiple departments and appeared to be typical of high jury settlements across the country and not an issue unique to Long Beach. In FY 20 and FY 21, settlements and judgements decreased due to the slowdown of cases making their way through the courts. However, it is unknown at this time how much backlog exists or how this will affect costs when courts resume operations at normal capacity. In addition, costs for miscellaneous insurance such as property insurance are rising significantly, in part due to losses the City has incurred in recent years.

Due to the increased settlement and judgement costs incurred in FY 18 and FY 19, the General Liability fund began FY 21 with a negative $17.5 million in budgetary funds available. However, due to the temporary reduction in these costs in FY 21, there was an operating surplus in the fund of $5.4 million, bringing the budgetary funds available status to approximately a negative $12.1 million.

The table below provides a five- year history of miscellaneous insurance costs and settlements and judgements costs.

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Refuse and Recycling Fund Group

The Refuse/Recycling Fund receives approximately 95 percent of its total revenues from refuse and recycling charges assessed to residential and commercial accounts receiving City collection services. The remaining funds come from State grants for various programs and public outreach efforts (recycling, litter reduction, used motor oil collection, etc.), revenues from the sale of recyclables collected through the City's residential recycling program, fees paid by the City's licensed private refuse haulers for AB 939 compliance, and interest income. Over $4 million is provided annually to the General Fund to reimburse for programs such as street maintenance, tree trimming , and stormwater and environmental compliance.

In FY 21, with the COVID-19 pandemic ongoing, the increased amount of refuse tonnage collected, and increased costs associated with refuse collection contributed to expenditures exceeding revenues by approximately $0.7 million. While the City’s Health Order has been adjusted to allow for more social interactions , there has still been a significant increase in refuse tonnage collected over previous years. In addition, the Environmental Services Bureau ( ESB) implemented an organics pilot program in FY 21 to prepare for State-mandated organics collection, SB 1383, set to begin in January 2022.

The pilot program was offered to over 150 select commercial accounts so that Environmental Services Bureau (ESB) could gauge how best to rollout the program citywide.

The FY 21 operating shortfall was due to a multitude of factors: ESB collected over 201,000 tons of refuse in 2021 which is a 7 percent increase from pre- COVID times, Technology and Innovation MOU expenditures increased 27 percent from FY 20 , and revenues were reduced as rate payers were unable to pay for monthly services due to the pandemic.

Without any rate adjustments, ESB estimates that the Refuse Fund reserves may be exhausted in the next few years, as current rates do not support current service costs. In addition to escalating costs, State-mandated organics collection programs are expected to substantially impact the operations and further increase costs. As a result of increased operational costs and unfunded state mandates, ESB has begun a Cost-of-Service study.

The study will recommend rates for refuse, recycling, and organics collection at the true cost of service. Additional revenues resulting from the rate restructuring will be used to enhance refuse collection and recycling program development services.

Special Advertising and Promotions Fund Group

The Special Advertising and Promotions Fund Group (SAP) is a Special Revenue Fund dedicated to the specific purposes of “advertising, promotional , and public relations projects calling attention to the City, its natural advantages, resources, enterprises, (in millions) FY 17 FY 18 FY 19 FY 20 FY 21
Misc Ins 3.3$ 3.7$ 3.5$ 7.4$ 10.5$
Settlements & Judgements 12.7$ 15.2$ 27.2$ 8.4$ 3.2$ Combined Total 16.0$ 18.9$ 30.7$ 15.7$ 13.7$

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February 8, 2022

attractions, climate , and facilities ,” according to the City’s municipal code. Transient Occupancy Tax (TOT), also known as the hotel bed tax, collected by Long Beach hotels and short-term rentals is the largest source of revenue for the fund. The current tax rate is 13 percent of the nightly room rent , six percent of which is allocated to the General Fund Group, and six percent to the SAP Fund Grou p. The remaining one percent was added per the 2020 voter approved Measure B (TOT) and is intended for City arts organizations and the Long Beach Convention and Entertainment Center per the City Council Resolution. Other sources of SAP revenue include studio filming permits, special events licenses, and permits and fees.

TOT revenue has been dramatically impacted by the pandemic but began recovering in FY 21 and is continuing to do so in FY 22. Based on TOT performance during the last six months of FY 21, TOT revenues are improving in comparison to the prior year. However, due to revenue lost because of the recession, the budgetary funds available has declined.

To mitigate this, $5.2 million will be used to replace revenue lost during the recession as part of LBRA (Securing our City’s Future), which will bring the budgetary funds available back to pre-pandemic levels at the end of FY 21.

For FY 22 and beyond, despite improved revenues, TOT remains a volatile revenue source and has historically recovered more slowly after a downturn in comparison to other revenue streams. Current projections still show future years with an operating shortfall and continuing to draw down on funds available. City staff will continue to closely monitor and evaluate if full recovery may be projected sooner than FY 24 as currently anticipated.

Tidelands Area Fund Group

The Tidelands Area Fund Group is comprised of the Marina and Queen Mary funds.

Revenue for these funds is generated from various activities, specific to each fund. The Marina Fund supports the City’s three recreational marinas (Alamitos Bay , Long Beach Shoreline and Rainbow Marinas) including all maintenance, operations, security, fire and Emergency Medical Technician ( EMT) services. Revenue is generated through recreational and commercial use of marina property. Fees include dock/slip fees (paid by boat owners), restaurant, retail , and grounds rental leases, concession fees, park use fees, and special events and filming fees. The latest large- scale improvements (replacement of most docks) were funded by Marina Revenue Bonds, Series 2015. The Alamitos Bay Marina dock improvements were completed in April 2018. The Marina Fund revenues are pledged for the repayment of the bonds and future dock and related area improvements.

The Queen Mary Fund tracks the revenues and expenditures associated with the Queen Mary ship. The Queen Mary was closed during FY 21 because of the pandemic. Until the recent bankruptcy of the Queen Mary operator Urban Commons, revenue was generated through rent from the Queen Mary master lease, which included Queen Mary base rent, sublease rent from Catalina Express and passenger fees originating from the Carnival Cruise passengers’ lines that passed through the Queen Mary operator (in accordance with the lease). These revenues were anticipated to be sufficient to offset debt service on bonds issued to help fund urgent improvements to the Queen Mary. Since the second half of FY 20, Carnival Cruise revenues have been greatly impacted by the COVID-19

HONORABLE MAYOR AND CITY COUNCIL
February 8, 2022

pandemic (cruises were temporarily discontinued until August 2021) . In addition, Urban Commons did not make all the required transfers of the revenues from Carnival Cruise and did not make all rent payments. As a result, revenues from the Queen Mary in FY 21 were not enough to pay the full debt service on the outstanding Queen Mary bonds. The amount needed from the Tidelands Operating Fund Group to cover the shortfall in Queen Mary revenue was approximately $1.7 million in FY 21. The lease for the Queen Mary has effectively been terminated as a result of the Urban Commons bankruptcy and the City is cu rrently planning emergency repairs to the Queen Mary in preparation for reopening in FY 22. The financial situation will continue to be closely monitored.

Tidelands Operating Fund Group

The Tidelands Operating Fund Group, which primarily funds operations along the beaches and waterways, is heavily dependent on base oil revenue and an annual transfer from the Harbor Revenue Fund to support Tidelands Operations, including lifeguards, waterfront maintenance, the Convention Center, and Aquarium debt payments.

The Adopted FY 21 Budget assumed an $18.8 million transfer from the Harbor Revenue Fund to the Tidelands Operating Fund (a transfer of 5 percent of the Harbor’s Gross revenues is required by the Charter) and a $ 9.4 million transfer from the Tidelands Oil Revenue Fund to the Tidelands Operating Fund, based on a budgeted price of $35 per barrel. Actual Harbor revenues were greater than projected, so the transfer to the Tidelands Opearting Fund was $21.7 million, which is almost $3 million more than originally projected. Similarly, the actual oil revenue transfer to the Tidelands Operating Fund was $13.5 million , a little more than $4 million higher than originally projected, because the price of oil ended up averaging $59 per barrel for the year instead of the $35 per barrel originally assumed. Additionally, the fund experienced greater net revenues from the Convention Center due to the use of the Convention Center to provide emergency shelter for migrant children.

Along with better than projected revenues, the Tidelands Operating Fund also had greater costs than anticipated , specifically to support costs related to the Queen Mary . The Tidelands Fund supported $720,000 of Queen Mary debt service and $939,000 for Queen Mary operations as revenues in the Tidelands Area Fund Group were not enough to cover these costs as explained in the section above. Despite these higher costs, the improved revenue situation has helped to mitigate the impact of the costs on the funds’ bottom line.

Due to the factors described above, there is $2.2 million in FY 21 year -end Tidelands Operating Fund budgetary funds available. Additionally, staff is recommending the reallocation of funds from reserves to provide for approximately $1.55 million of additional critical Tidelands projects. $1 million of this reallocation of funds from reserves is coming from the one-time cash payment ($4.8 million) by the Aquarium of the Pacific related to the Pacific Visions project 2017 loan that was prepaid and prefunded. These funds were received and set aside to help keep debt service costs level in the future; but with the current improved oil revenue projections, it is anticipated that some of the future debt service costs can be absorbed by the increased revenue. The other $550,000 will come from utilizing parking convention center surcharge reserves to fund two convention center related projects that were already included as part of the FY 22 Tidelands Capital

HONORABLE MAYOR AND CITY COUNCIL
February 8, 2022

Improvement Plan (Beverly O’Neill signage project at $300,000 and other convention center improvements at $2 50,000). The parking convention center surcharge reserves are funded from an agreement with SMG where a portion of funds from parking space sold is remitted to the City with expenditures to be approved by the City Manager.

In total with the FY 21 ending budgetary funds available and the reallocation of funds from reserves, there is a total of $3,794,710 that can be allocated to projects. The proposed uses of these funds are listed below.

• Enhancement for the City Manager Department of $82,750 (in addition to $82,750 funding from the General Fund, for a total of $165,500) to support the FY 22 Fourth of July downtown fireworks show display which includes Police and Fire staffing in immediate area only, fencing rentals, security, CEQA fees, barge rental , and fireworks. Funding does not include citywide Fourth of July staffing or fireworks notifications and safety campaigns.
• Enhancement for the Public Works Department of $3, 000,000 for Queen Mary critical repairs. $2.5 million has already been set aside as part of the funding for the FY 21 Tidelands Capital Improvement Projects design, and this $3 million allocation will bring total funding to $5.5 million, and help support the repair of critical mechanical systems including bilge pumps, alarm systems, generators, and
bulkhead repairs on the Queen Mary.
• Enhancement for the Public Works Department of $400,000 to improve the Bayshore Concessions stand
which will include building modifications to add an
elevator lift to facilitate access to the second floor. • Enhancement for the Public Works Department of $ 61,960 to make pavement repairs to Pine Avenue as contractually obligated by the Grand Prix agreement. • Enhancement for the Public Works Department of $100,000 to complete the Colorado Lagoon Playground and support additional planting and restoration adjacent to the playground.
• Enhancement for the Public Works Department of $150,000 to continue developing the conceptual design for the Alamitos Bay Water Quality improvement project including a pump station, design modifications to existing infrastructure, and a trash collection system.

Towing Fund Group

The Towing Fund provides the City’s towing and vehicle lien sale operations. It usually supports the City’s General Fund Group through an annual transfer of some portion of net income. It is funded through towing fees, charges for vehicle storage, and proc eeds collected from the lien sale of unclaimed vehicles.

In FY 20, t he COVID-19 pandemic and associated response resulted in revenue $1.8 million less than budgeted. Factors contributing to the decreased revenue include a citywide moratorium on non- essential tows, suspension of lien sales due to social

HONORABLE MAYOR AND CITY COUNCIL
February 8, 2022

distancing concerns, and a COVID-19-related storage fee waiver program. To reduce the impact of this shortfall, extensive efforts were taken to minimize expense and defer projects in FY 20 as well as cancel the planned $1 million transfer to the General Fund.

Even with these cost reduction measures, the Towing Fund Group ended FY 20 with a net annual loss and budgetary funds available of about $269,000.

In FY 21, fees were raised as part of the Adopted FY 21 budget to help cover costs.

However, the continued COVID -19 pandemic and response in the first half of FY 21 extended revenue shortfalls. In the second half of FY 21, total revenue has exceeded total expenditur e by $1.1 million. This was largely due to the stronger -than-expected revenue recovery coupled with extreme cost reduction measures and deferral of special projects. The $1 million transfer to General Fund was once again canceled in FY 21, with the budgetary funds available to be used to replenish the low fund balance and fund upcoming expenses that have been previously deferred.

For FY 22, Towing operations are anticipated to be at pre- pandemic levels, provided normal tow operations continue. If there are no residual pandemic impacts, restored revenues plus continued expense minimization will keep the fund balance in the positive.

City staff will continue monitoring this fund as well as its ability to make the budgeted General Fund transfer in FY 22.

Uplands Oil Fund Group

The Uplands Oil Fund Group accounts for oil revenue outside the Tidelands area and all costs and revenues for the City’s proprietary oil interests, including accumulating reserves for the City’s portion of oil well abandonment and site clearance liabilities. Revenues are derived from participation in oil operations and oil production overhead fees received by the City as Unit Operator for the Tidelands Oil operations. Presently, over half of the revenue in this fund is from overhead fees and less than half is from oil sales. The FY 21 Budget assumed a price of $35 per barrel, with the actual price of oil averaging $59 per barrel. As such, the Uplands Oil fund was able to transfer $7.3 million to the General Fund Group, which is $2.6 million higher than budgeted. These projections include the needed set aside for oil field abandonment funding.

FY 21 Year-End Appropriation Adjustments

On September 8, 2020, the City Council adopted the Appropriations Ordinance governing the City’s Adopted Budget for FY 21 . 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 to the City Council for consideration. The requested appropriation adjustments for FY 21 year- end are noted in the Fiscal Impact section.

This matter was reviewed by Principal Deputy City Attorney Richard F. Anthony on January 19, 2022.

HONORABLE MAYOR AND CITY COUNCIL
February 8, 2022

TIMING CONSIDERATIONS

City Council action is requested on February 8, 2022 to close the City’s books for FY 21 in a timely manner.

FISCAL IMPACT

To accurately reflect FY 21 year-end transactions and match appropriations to expenditures, the following actions are requested:

Citywide

• Increase appropriations in the General Fund Group in the Citywide Activities Department by $6,000,000 to place Measure M revenue in escrow in accordance with a Stay Order Agreement on Water and Sewer transfers , offset by funds set aside for this purpose.

In June 2018, voters approved Measure M which would allow the City to continue the historical transfer of Water, Sewer, and Gas Funds to the General Fund. In 2019, litigation on Measure M transfers challenged the constitutionality of the Water and Sewer portions. The Los Angeles Superior Court since ruled in favor of the plaintiffs against the City and the City is appealing the decision. On December 1, 2021, the appellate court ruled against the City of Long Beach in the l awsuit challenging the legality of the City’s Measure M charter amendment. The City disagrees with the appellate court ruling and will appeal to the Supreme Court. Until a final judgement is made, the City has agreed to escrow $6 million of the FY 2 1 transfer totaling $12.7 million. The appropriation increase will support the transfer to the escrow fund, where funds will be held until the case is decided.

• Increase appropriations in the General Fund Group in the Health and Human Services Department by $2,272,633 to transfer funds to the Housing Authority Fund Group in the Health and Human Services Department to repay funds that ha ve been deemed as unallowable costs by an audit, offset by release of reserves for liabilities no longer needed for their original purpose.

In November 2021, the U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG) published the final results of their March 2020 review of the Housing Authority of the City of Long Beach’s Housing Choice Voucher Program. The report identified indirect costs that needed to be paid by the General Fund, rather than by Federal grant funds to which the costs were originally charged. The City has already made substantial progress on the corrective acti ons required by the audit in the indirect cost plan allocation methodology to avoid any such future repayments. This unbudgeted cost to the General Fund is offset by a release of reserves for liabilities no longer needed for their original purpose, as described in the reserves section of this performance report.

HONORABLE MAYOR AND CITY COUNCIL
February 8, 2022

LB Reads
One Book
Touch a
Truck
CD 1 500 -
CD 2 500 -
CD 3 500 5,555
CD 4 - -
CD 5 500 -
CD 6 500 -
CD 7 - -
CD 8 500 -
CD 9 500 -
Total 3,500 5,555
• Increase appropriations in the General Fund Group in the Citywide Activities Department by $33,740,149 for transfers to the General Fund, Special Advertising and Promotions Fund, and Uplands Oil Fund to replace lost revenue, offset by General Funds freed up as a result of federal ARPA funds covering existing City services.

As part of the Long Beach Recovery Act , $75.7 million was approved for the Securing our City’s Future category . This category is funded by General Fund monies that are available due to ARPA funding that makes up for the City’s pandemic-impacted revenue loss in order to maintain current government services. This has allowed for a strengthened City fiscal standing and has resulted in the restoration of reserves and City services through the elimination of employee furloughs in the second half of FY 21. This appropriation increase request is to budget for the operating transfers necessary to allocate General Fund monies to the various FY 21 uses – $22.4 million is to replace lost revenue that resulted in a decline in operating and emergency reserves in the General Fund; $1.5 million is to restore revenue loss in the Uplands Oil Fund; $5.2 million is to restore revenue loss in the Special Advertising and Promotions Fund; and $4.5 million is to fund the cost of restoring City services as a result of eliminating employee furloughs.

• Increase appropriations in the Special Advertising and Promotion Fund Group in the Citywide Activities Department by $9,055 to return previously allocated District Priority Funds back to the council districts ’ unallocated District Priority Fund reserves after event cancellations, offset by previously allocated One- time District Priority Funds in the City Manager Department; and,

Decrease appropriations in the Special Advertising and Promotion Fund Group in the City Manager Department by $9 ,055 t o offset a transfer to the Citywide Activities Department.

Council districts previously allocated funds to the City Manager Department for the Touch a Truck event and the LB Reads One Book event. The COVID-19 pandemic caused these events to be cancelled and funds are being returned to the respective council districts per policy. The table below lists the amounts going back to the respective Council Districts in FY 21.

HONORABLE MAYOR AND CITY COUNCIL
February 8, 2022

• Increase appropriations in the Debt Service Fund Group in the Citywide Activities Department by $653,000 to align budget with actuals incurred for payment of debt service related expenses.

This is a technical correction to align budget with actuals in the Debt Service Fund to pay principal , interest, and fiscal agent fees for non- Redevelopment governmental debt. Resources accumulated for this purpose in the General Fund Group, Special Revenue Fund Groups, and Capital Project Fund Group are transferred to the Debt Service Fund Group to pay debt service on numerous separate bond issues sold over the years.

Economic Development

• Increase appropriations in the General Fund Group in the Economic Development Department by $673,664 for unfunded costs associated with the maintenance or beautification of City-owned properties, offset by drawing down on funds available.

In FY 21, the Economic Development Department incurred approximately $673,664 in unbudgeted expenditures for the maintenance, beautification, and administration of City -owned properties , which includes the holding cost for the Armory, unbudgeted roof repairs for 309 Pine, and miscellaneous costs for property management. An appropriation increase is needed for these expenses, offset by drawing down on General Fund funds available.

• Increase appropriations in the General Fund Group in the Economic Development Department by $26,193 for administrative costs related to the Business License Grant Forgiveness program for businesses impacted by the COVID -19 pandemic, offset by funds available approved by the City Council for this purpose.

On November 17, 2020, the City Council approved a recommendation to allow deferral of business license taxes and fees until March 31, 2021 and to provide for grants to businesses to offset business license taxes and fees for those businesses closed or materially restricted and impacted for an extended period of time due to the City Health Order. At the time of this letter, the grant program was estimated to cost $1.3 million plus administrative costs of $75,000 and was to be funded by funds available and potentially General Fund Operating reserves . The Economic Development Department has received grant applications, but any approved grant awards are expected to be recorded in FY 22. The requested budget adjustment is to offset the grant administrative cost incurred in FY 21.

• Increase appropriations in the General Fund Group in the Economic Development Department by $243,218 as a technical correction to align budget with actuals, offset by funds available intended for this use.

Due to a technical error found in the processing of a purchase order in FY 21, the Economic Development D epartment incurred a mistimed posting of $121,609 which also resulted in a system generated budget adjustment decrementing the

HONORABLE MAYOR AND CITY COUNCIL
February 8, 2022

budget in the same amount which resulted in the department having a negative budget of $121,609. This requested budget adjustment is a technical system correction to reverse the system generated entry and aligning budget to actuals.

• Increase appropriations in the General Fund Group in the Economic Development Department by $ 86,000 for a transfer of ineligible grant related expenses in the Community Development Grants Fund Group, offset by drawing down on funds available.

The Economic Development Department requests an appropriation increase in the General Fund Group in an amount of $86,000 to offset expense transfers from the Community Grants Fund Group for its Workforce Development grant programs.

The transfers are attributed to a variety of factors, including persistent reconciliation challenges due to the conversion to the City’s new financial system, and COVID-19 impacts to some performance- based programs which resulted in lower than anticipated revenues. While the department makes every effort to maximize available funding, the transferred expenses generally exceeded the period of availability for any active program. The department has already implemented several process improvements related to the programmatic and financial management of its grant programs. These improvements have minimized the need to transfer expenses to the General Fund Group in FY 21 compared to prior years . An increase in appropriations is requested for these unbudgeted costs, offset by drawing down on General Fund funds available.

Energy Resources Department

• Increase appropriations in the Tidelands Oil Revenue Fund Group in the Energy Resources Department by $5,456 ,806 to align the budget to actual expenditures associated with higher oil revenues. Offsetting revenues are currently budgeted within the fund group.

• Increase appropriations in the Uplands Oil Fund Group in the Energy Resources Department by $1,741,091 to align the budget to actual expenditures associated with higher oil revenues and expenditures, offset by revenue.

Expenses in the Uplands Oil Fund and Tidelands Oil Revenue Fund Groups exceeded the budget amounts in each fund. The Adopted FY 21 Budget oil projections were based on $35 per barrel. In FY 21, the actual average price of oil was around $59 per barrel. Both price and production costs impact the City's net oil revenues (gross revenues minus oil related expenditures). The higher than anticipated price of oil resulted in an increase in both Uplands and Tidelands net revenues and corresponding increases in payments (classified as expenditures) to the State of California Lands Commission and to the transfer amounts to the General Fund and Tidelands Operations Fund Groups. As such, appropriation increases are requested in the Tidelands Oil Revenue and Uplands Oil Fund Groups in the Energy Resources Department to align budget to actual expenses.

HONORABLE MAYOR AND CITY COUNCIL
February 8, 2022

APPROVED:

THOMAS B. MODICA

CITY MANAGER

SUGGESTED ACTION:

Approve recommendation.

Respectfully submitted,

KEVIN RIPER

DIRECTOR OF FINANCIAL MANAGEMENT

ATTACHMENTS: A – FY 21 CITYWIDE EXPENDITURES BY FUND
B – FY 21 TOP 40 GENERAL FUND REVENUE BY SOURCE
C – FY 21 GENERAL FUND EXPENDITURES BY DEPARTMENT
D – FY 21 LONG BEACH RECOVERY ACT EXPENDITURES AND REVENUES E – LONG BEACH RECOVERY ACT PROGRAM ALLOCATIONS

CITY OF LONG BEACH EXPENDITURES BY FUND
YEAR-END FY 2021
FY21 New Estimated All-Years FY 21 Adopted FY21 FY 21 Adjusted FY 21 Year to Date FUND GROUP Expenditures as of Appropriation Carryover' Budget Amendments Budget 9/30/21 ·.· .. ·. . ; Funds With All-Years Carrvover • . . ;, .· ' .· . ····. ; ; ;:, : ·.·· .. , ..

AIRPORT $ 45,601,812 $ 74,014,492 $ 119,616,304 $ 35,557,871 $ 155,174,175 $ 82,239,462 BUSINESS ASSISTANCE 731,848 633,907 1,365,755 3,415,552 4,781,307 453,894 2 CAPITAL PROJECTS 112,780,354 154,043,315 266,823,669 259,226,908 526,050,577 137,502,300 CIVIC CENTER 22,722,099 3,891,270 26,613,369 7,440,861 34,054,230 30,939,095 COMMUNITY DEVELOPMENT GRANTS 19,262,313 47,837,927 67,100,240 83,573,429 150,673,669 51,176,420 CUPA 2,410,787 220,123 2,630,910 2,385,270 5,016,180 2,200,234 DEVELOPMENT SERVICES 27,586,744 1,749,874 29,336,618 2,474,256 31,810,874 29,054,481 FLEET SERVICES 44,860,488 2,978,256 47,838,744 11,252,834 59,091,578 43,334,629 GAS 142,304,091 12,939,013 155,243,104 14,777,313 170,020,417 115,114,180 2 GAS TAX STREET IMPROVEMENT 9,639,365 6,260,651 15,900,017 9,639,365 25,539,382 9,888,014 GENERAL GRANTS 8,068,290 15,900,812 23,969,102 155,010,462 178,979,563 97,814,081 GENERAL SERVICES 62,595,146 19,432,815 82,027,961 7,885,427 89,913,388 67,115,027 HEALTH 58,700,024 66,932,985 125,633,009 99,128,010 224,761,020 87,867,444 HOUSING AUTHORITY 93,904,996 8,378,417 102,283,413 21,020,031 123,303,444 106,756,035 HOUSING DEVELOPMENT 3,727,605 7,027,428 10,755,033 1,740,098 12,495,131 2,483,888 INSURANCE 57,461,744 - 57,461,744 7,650,822 65,112,566 49,856,905 REFUSE/RECYCLING 54,284,256 (57,281) 54,226,976 146,456 54,373,432 51,893,662

RESERVE FOR SUBSIDENCE - - - - - -
2 SUCCESSOR AGENCY 4,222,220 24,337,278 28,559,499 1,622,452 30,181,950 4,232,626 2 SUCCESSOR AGENCY - DEBT SERVICE 26,369,058 - 26,369,058 27,962,274 54,331,332 51,304,047 2 TIDELANDS OPERATING 89,619,628 99,299,082 188,918,710 25,415,658 214,334,368 115,125,177 2 TIDELANDS AREA 26,777,150 16,532,594 43,309,744 2,108,411 45,418,156 29,385,709 SUBTOTAL $ 913,630,019 $ 562,352,959 $ 1,475,982,979 $ 779,433,758 $ 2,255,416,737 $ 1,165,737,310 ·· .. · ......... • • •· .... ;, Funds Without All-Years Carrvover •. ' ·. ' / •• ; . ,.; ii• ... i;, ••• ' • BELMONT SHORE PARKING METER 787,500 $ 787,500 $ 2,640 $ 790,140 $ 657,144 DEBT SERVICE 8,159,695 8,159,695 3,569,764 11,729,459 11,729,331 EMPLOYEE BENEFITS 338,440,755 338,440,755 94,990,790 433,431,545 386,135,481 GENERAL 559,285,185 559,285,185 194,742,374 754,027,559 664,201,794 HARBOR 649,329,439 649,329,439 372,718,841 1,022,048,279 366,441,840 POLICE & FIRE PUBLIC SAFETY OIL PROD ACT 3,318,387 3,318,387 - 3,318,387 3,005,377 SERRF 42,176,170 42,176,170 (15,612 42,160,558 40,327,215

SERRFJPA - - - - -
SEWER 23,788,961 23,788,961 6,613,594 30,402,555 20,237,171 SPECIAL ADVERTISING & PROMOTION 10,991,372 10,991,372 718,746 11,710,117 10,301,508 TIDELANDS OIL REVENUE 86,180,079 86,180,079 5,301,342 91,481,420 91,481,420 TOWING 6,806,146 6,806,146 (23,096) 6,783,050 5,168,379 UPLANDS OIL 8,029,761 8,029,761 1,778,237 9,807,998 9,807,997 WATER 136,799,603 136,799,603 29,379,146 166,178,748 117,697,320 SUBTOTAL $ 1,874,093,051 $ - $ 1,874,093,051 $ 709,776,766 $ 2,583,869,817 $ 1,727,191,979 TOTAL -ALL FUNDS $ 2,787,723,070 $ 562,352,959 $ 3,350,076,030 $ 1,489,210,524 $ 4,839,286,553 $ 2,892,929,288 Notes
1· Estimated All-Years Carryover is composed of multi-year grants and Capital Improvement Program (CIP) funds; unspent amounts are carried over to future years, resulting in a larger adjusted budget. These carryover estimates are based on the FY 21 Adopted Budget; Financial Management is currently conducting a review to update these figures. 2 · Fund Groups were modified to match the new Budget Fund Groups to reflect the transition to the new Financial system, Munis. Adjusted Budget and Actuals were updated according to how they were booked in Munis. Adopted Budget, All Years Carryover and Estimates to Close reflect how they were booked in the old Financial system, FAMIS, with modifications between Fund Groups to accommodate the new Accounting structure.

ATTACHMENT A
I z
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
.

Attachment B

CITY OF LONG BEACH GENERAL FUND REVENUE SUMMARY
YEAR-END 2021
0 Revenues FY 20 Adjusted FY 20 Actual FY 21 Adjusted Estimates-to FY 21 Actual Percent of FY 21 ...

C. Budget Revenue as of Budget Close Revenue as of Actuals ~ 9/30/2020 9/30/2021* Over/(Under)
Estimates-to-
Close
1 REAL PROPERTY TAX $125,442,102 $127,393,451 $133,679,752 $143,049,971 $ 142,955,205 -0.1% 2 TRANSFERS FROM OTHER FUNDS 24,556,406 71,384,729 44,719,166 47,039,394 76,391,772 62.4% 3 CITY SALES AND USE TAX 64,676,195 64,455,563 66,739,189 74,966,894 74,963,267 0.0% 4 TRANSACTION AND USE SALES TAX-MEASURE A 59,724,959 62,233,157 62,688,149 73,713,678 73,485,405 -0.3% 5 PROPERTY TAX IN-LIEU OF VLF 53,041,402 53,930,730 56,163,462 57,057,334 57,057,333 0.0% 6 ELECTRIC USERS TAX & PENALTIES 20,566,947 19,178,261 20,566,947 20,231,792 23,450,979 15.9% 7 PARKING CITATIONS 19,287,802 15,607,250 17,978,399 14,223,731 13,821,607 -2.8% 8 CHARGES FOR SPECIAL SERVICES 13,902,624 13,392,284 14,025,613 12,350,599 13,332,246 7.9% 9 BUSINESS LICENSE TAXES 12,457,000 12,049,017 12,732,000 12,350,000 12,767,328 3.4% 10 TRSF FRM EF • WATER & SEWER 11,352,697 14,352,697 11,693,278 9,693,278 12,693,278 30.9% 11 EMERGENCY AMBULANCE FEES 13,626,931 13,111,890 13,626,931 12,574,888 12,422,318 -1.2% 12 TRANSIENT OCCUPANCY TAX 22,989,165 13,320,899 13,846,633 11,339,225 12,140,413 7.1% 13 CANNABIS LICENSE TAX 4,000,000 10,289,430 7,985,050 9,237,523 12,099,297 31.0% 14 0TH DEPT SVC TO PROP FUNDS REV 9,277,428 9,898,969 9,919,955 7,853,297 10,080,652 28.4% 15 ELECTRIC COMPANY FRANCHISES 7,310,161 6,843,996 7,062,088 8,392,046 8,491,374 1.2% 16 AMERICAN GOLF LEASE 4,755,119 3,741,122 4,800,000 7,455,528 6,603,871 -11.4% 17 LAND,BLDG,R/W,EASEMENT,APT RENTALS 5,093,021 4,662,137 5,274,783 5,139,800 5,813,773 13.1% 18 TELEPHONE USERS TAX & PENAL TIES 7,185,728 5,797,369 5,090,406 4,305,739 5,177,114 20.2% 19 WATER USERS TAX & PENAL TIES 4,273,226 4,828,689 4,423,179 4,711,658 5,144,438 9.2% 20 MISC REV 619,006 1,401,519 444,933 950,318 4,857,861 411.2% 21 GAS USERS TAX & PENAL TIES 3,961,177 4,043,194 4,899,347 4,918,924 4,844,585 -1.5% 22 PIPELINE SAFETY FEES 3,001,760 879,683 3,144,554 3,144,554 4,608,926 46.6% 23 REIMB OF STATE MANDATED & FEDERAL COSTS 1,502,000 1,133,583 3,585,000 3,632,280 4,519,345 24.4% 24 COMMERCIAL SRVCS/BILLING & COLLECTION RE\ 5,333,012 5,213,204 5,107,013 5,107,013 4,428,503 -13.3% 25 PIPELINE FRANCHISES 2,548,376 1,839,708 2,178,810 3,509,014 3,393,514 -3.3% 26 HAULER FEES 3,000,000 3,015,304 3,000,000 3,000,000 3,174,113 5.8% 27 REAL PROPERTY TRANSFER TAX 2,303,228 1,711,499 2,292,084 2,622,619 2,690,636 2.6% 28 EXCAVATION PERMITS 1,398,413 3,977,437 2,695,681 3,000,000 2,625,515 -12.5% 29 ASSET MANAGEMENT CHARGES 2,429,660 2,429,660 2,479,379 2,479,379 2,479,379 0.0% 30 CURB & WALK PERMITS 818,716 2,301,405 1,196,414 2,500,000 2,417,076 -3,3% 31 INTEREST-POOLED CASH 3,544,435 5,288,693 3,690,000 3,160,000 2,322,029 -26.5% 32 EL DORADO PARK FEES 1,232,205 1,348,418 1,402,705 1,403,000 2,166,080 54.4% 33 MISC REVENUE FROM OTHER AGENCIES 2,357,198 2,265,936 2,079,626 2,003,248 2,062,119 2.9% 34 HARBOR-POLICE 2,544,783 2,063,389 2,104,656 1,818,000 1,817,425 0.0% 35 FIRE INSPECTION FEES 1,974,612 1,991,521 1,781,767 2,421,435 1,802,878 -25.5% 36 FIRST RESPONDER FEE 2,271,618 783,054 1,689,276 1,721,603 1,612,911 -6,3% 37 TRANSNT OCCUP TAX-MEASURE B 1 % 306,334 306,334 1,700,000 1,477,485 1,464,560 -0.9% 38 OIL PRODUCTION TAX 1,488,093 1,500,927 1,508,358 1,413,281 1,349,281 -4.5% 39 PUBLIC SVC CHGS TO PROPRIETARY FUNDS 153,000 987,736 432,000 818,974 1,107,086 35.2% 40 METERED/OTHER PARKING 1600000 1 143 130 1500000 1055000 1034376 -2.0% SUBTOTAL TOP 40 REVENUES $ 527,906,539 $ 572,096,973 $ 561,926,581 $ 587,842,503 $ 635,669,868 8.14% Alf ALL OTHER REVENUES $ 28,807,378 $ 27,582,189 $ 25,636,506 $ 14,142,717 $ 17,047,495 20.5% ~··
TOTAL GENERAL FUND REVENUES $ 556,713,917 $ 599,679,162 $ 587,663,087 $ 601,985,221 $652,717,362 8.4% FY 21 Actuals subject to change, as the books for FY 21 are not fully closed and all numbers are unaudited, although a significant change ls considered unlikely. Actuals reported In this summary totaling $652,717,362 exclude $77.8 mllllon In revenue received but are designated for future Long Beach Recovery Act uses and Measure M escrow set-asides.

Notes:

Property Tax revenue budget is based on the assessed valuation for 2019/2020 covering 2018 calendar year sales and other values set by the assessor as of January 1, 2019. This report consolidates all property tax, including post-RDA dissolution property taxes and former tax increment pass-through revenues into one citywide property tax category. FY 21 actuals higher than budget is due various factors including larger commercial sales, as well as growth due to development and improvements. Specifically, FY 21 actuals Includes $6.7 million in unanticipated revenues from former-RDA project areas comprised of the City's share of prior-year, one-time adiustments.
2 Transfers from other funds includes various transfers to the General Fund. This report excludes a total of $77.8 million which is designated for specific purposes:

American Rescue Plan Act revenue ($71.8 million) and revenues set-aside for Measure M escrow ($6 million). Unbudgeted revenues received by the General Fund and reported here include $1.69 million due to FEMA supported project/expense clean-up to be reserved for future related uses, as well as $27 million in Long Beach Recovery Act funding to recover revenue loss due to pandemic. This has strengthened the City's fiscal standing, which has allowed for a $22.4 million restoration to reserves and $4.5 million In funding to end employee furloughs for half of the year. Actuals also include $1.45 million in additional one-time revenue from the Gas Fund Group from higher revenue performance (within the City Charter-authorized level of 12 percent), and $2.6 million higher than budgeted transfer from the Uplands 011 Fund Group. Due to uncertainty, the budgeted price per barrel for FY 21 was reduced from $55 per barrel assumed prior to the pandemic, to $35 per barrel. Actual oil prices have recovered and averaged around $60 per barrel in FY 21.

Sales and Use Tax, non-Measure A, ended the year higher than budget, which had assumed that FY 21 would recover from pandemic-related losses more slowly across several sales tax categories. Actual year-end revenues align with prior estimates reported as part of the Mid-year Budget Performance Report. While certain categories such as restaurant and hotels, have not fully rebounded to pre-pandemic levels, the City continues to experience a steady increase across various categories Including pool revenues from increased online sales activity and the collection of online sales tax through AB 147.

Measure A revenues followed a similar pattern to Sales and Use Tax performance, including additional revenues generated through AB147, which ensured that retailers would collect and remit both Sales and Use, as well as Transactions and Use Taxes. Actual year-end revenues closely align with previous estimates of $73.7 million as reported as part of the mid-year FY 21 Budget Performance Report.

Electric UUT includes payments due in FY 20 but remitted in FY 21. In addition, actuals performed higher than FY 21 budget which was kept flat from the FY 20 budget due pandemic-related impact on FY 20 actuals (delayed payments, business closures) during the time of budget development.

Parking citation revenue came in lower than budgeted and continues to be impacted by City programs intended to provide relief to individuals during the pandemic, which includes a program for residents to appeal and request a waiver for citations issued between May 18, 2020 and June 30, 2021. The FY 21 actuals also reflects timing of collections impacted by Relief Payment plans, in addition to other standard and indigent payment plan programs.

Charges for Special Services Is largely comprised of revenues received by the Police Department to pay for services provided to its customer agencies and is based on actual expenses incurred to provide services. The previously anticipated shortfall from budget did not reflect amounts anticipated in the budget but previously booked in other line items. Following adjustments, as anticipated In the Mid-year FY 21 Budget Performance report, year-end actuals did come in more closely to bUdQet.

CITY OF LONG BEACH GENERAL FUND REVENUE SUMMARY
YEAR-END 2021
Water and Sewer Funds' transfers year-end total $12,693,278 and is within the City Charter-authorized level of 12 percent.

Attachment B
Emergency ambulance fees ended the year lower than budget and close to prior estimates. Despite a gradual increase to transport activity, in comparison to declines in FY 20 (likely due to the pandemic), the year-end revenue reflects reduced collections due to an increase to non-insured customers and non-transports. 10 Transient Occupancy Tax revenues came in lower than budget, which projected that the City's TOT revenue would begin to partially recover to pre-pandemic averages starting at the beginning of FY 21. Prior estimates based on general fund receipts covering October through June, and reflect a slower recovery pace for the start of the fiscal year than anticipated.
11 Cannabis actuals higher than anticipated due to increased dispensary sales in FY 21. Higher than anticipated performance started in FY 20 and is now projected to stabilize at or around these higher levels.
12 Other department services to proprietary funds primarily Includes revenues for police services provided at the Civic Center and the Airport and is based on actual expenses Incurred to provide services. As anticipated in Mid-year FY 21 Budget Performance Report, year-end actuals came in closer to budget than previously estimated. Prior estimates were based on data available earlier in the year and assumed a reduced need for services at these facilities. 13 American Golf Lease revenues Includes $1.6 million rent payments due in FY 20 but collected in FY 21 following rent deferment negotiations with the contractor.

The estimate-to-close of $7.5 million was based on FY 21 mid-year Information. Whereas, year end actuals are near the $6.5 million revised estimate-to-close as disclosed In the footnotes as part of the previous Mid-year FY 21 Budget Performance Report. 14 Telephone Utility Users Tax revenues higher than previously estimated. Estimate assumed a much steeper decrease from prior year actuals earlier in the fiscal year. Year-end actuals ended closely to budget, which assumed the continued annual decline In revenues from limited numbers of new subscribers and a highly competitive price environment.
15 Water Utility Users Tax revenue came in higher than budget, which did not assume the rate increases as approved by the Water Commission for FY 2021. At the time of budget development, only modest increase over FY 20 was assumed based on uncertainty with consumption during the pandemic. 16 Miscellaneous revenues include $3.8 million from unclaimed refunds related to a settlement agreement from a class action lawsuit on the City's telephone users tax. 17 Pipeline Safety revenue actuals include $1.8 million In delayed payments due In FY 20 but received and booked in FY 21. 18 FY 21 year-end revenues Include revenues from mutual aid reimbursements, which offset actual expenses incurred for staffing assistance provided for California wildland fire events during for both FY 20 and 21.
19 Commercial Services/Billing and Collections revenue less than budget. Revenue received is based on and will offset Commercial Services actual expenses incurred during the fiscal year.
20 Interest-pooled cash is subject to market conditions and securities in the City's investment pool. FY 21 actuals reflect Interest earned as of 09/30/2021, which include earnings from decreased interest rates effective since March 2020 and, due to uncertainty at the time of budget development, was not anticipated as part of the FY 21 budget.
21 El Dorado Park fees higher than anticipated in FY 21 primarily due to annual parking pass fee increase in FY 21, and the pandemic-related indoor restrictions that resulted in higher than anticipated annual pass sales and daily parking passes from visitors. 22 Revenues generated from additional 1 percent transient occupancy tax from Measure B collected and reported in separate line item from other transient occupancy tax revenues. Measure B revenues are intended for City's arts organizations and the Long Beach Convention and Entertainment Center. As with overall TOT, revenues generated from Measure B also came in under budget. 23 Public service charges to propriety funds is revenue collected to offset actual cost incurred to fulfill work order requests, as well as routine services (window washing, elevator maintenance), from other City departments. Revenues will fluctuate annually based on service needs. 24 All other revenues include various department sources. Although year-end actuals came in $2.9 million higher than prior estimates, actuals were $8.6 million under budget and includes pandemic-related revenue shortfalls such as off-street parking/parking garages, parks programs, and police services to special events. This category also includes utility late fees estimated to be $2.8 million less than budget due to pandemic relief programs that suspended late fees for utility customers impacted by the pandemic.

CITY OF LONG BEACH

GENERAL FUND EXPENDITURES SUMMARY
YEAR-END FY 2021
+Excluding Budget Adjustments without Offsets
Percent of
FY 21 Adjusted One-time Actuals and Adjusted FY 21
Department FY 21 Adopted Budget FY21 Actual Carryover and Carryover Budget Budget (including YE perf Expenditures (Over)/Under Expended report BAs} Encumbrances Adjusted Budget including
carrvover
Actuals and Percent of
Carryover Adjusted FY 21
FY21 Modified Budget
Adjusted Budget (Over)/Under Expended Modified Adjusted including Budget carrvover City Auditor $ 2,591,904 $ 2,592,328 $ 2,307,676 $ 245,105 39,547 98% $ 2,592,328 $ 39,547 98% City Attorney $ 2,963,297 $ 2,823,960 $ 2,761,177 $ . 62,784 98% $ 2,823,960 $ 62,784 98% 1 City Clerk $ 5,114,794 $ 5,264,346 $ 3,863,937 $ 367,500 1,032,910 80% $ 5,264,346 $ 1,032,910 80% 2 City Manager $ 6,164,671 $ 9,440,820 $ 8,733,451 $ 672,368 35,000 100% $ 9,343,607 $ (62,213) 101% City Prosecutor $ 5,882,328 $ 6,298,564 $ 5,415,135 $ 441,610 441,818 93% $ 6,298,564 $ 441,818 93% 3 Citywide Activities $ 37,043,453 $ 66,584,431 $ 56,959,895 $ 2,526,800 7,097,736 89% $ 65,604,766 $ 6,118,071 91% Civil Service $ 2,919,307 $ 2,840,157 $ 2,822,097 $ . 18,060 99% $ 2,840,157 $ 18,060 99% Development Services $ 5,067,659 $ 4,980,802 $ 4,828,839 $ . 151,963 97% $ 4,980,802 $ 151,963 97% Disaster Prep & Emerg Comm $ 12,596,230 $ 12,705,774 $ 12,659,129 $ 12,980 33,665 100% $ 12,705,774 $ 33,665 100% 4 Economic Development $ 4,154,480 $ 36,949,441 $ 35,524,060 $ 1,425,382 (0) 100% $ 36,189,777 $ (759,664) 102% 5 Fire $ 107,712,258 $ 113,454,271 $ 112,556,099 $ 25,477 872,695 99% $ 112,793,892 $ 212,316 100% Financial Management $ 18,368,814 $ 18,523,679 $ 17,849,871 $ 523,808 150,000 99% $ 18,523,679 $ 150,000 99% 6 Health and Human Services $ 4,886,800 $ 17,217,077 $ 16,109,286 $ 840,037 267,754 98% $ 14,854,444 $ {2,094,879) 114% 7 Legislative $ 5,645,680 $ 5,551,597 $ 5,185,881 $ . 365,716 93% $ 5,551,597 $ 365,716 93% Library Services $ 14,349,519 $ 14,149,275 $ 13,784,796 $ 18,750 345,729 98% $ 14,149,275 $ 345,729 98% 8 Police $ 247,102,849 $ 255,253,752 $ 245,882,564 $ 6,094,906 3,276,283 99% $ 255,253,752 $ 3,276,283 99% 9 Parks, Recreation, and Marine $ 36,164,940 $ 38,193,929 $ 36,161,833 $ 590,133 1,441,962 96% $ 38,165,329 $ 1,413,362 96% Public Works $ 40,556,203 $ 46,393,722 $ 45,248,923 $ 1,144,418 381 100% $ 46,393,722 $ 381 100% Technology & Innovation $ • $ 1,024,485 $ 984,296 $ . 40,189 96% $ 1,024,485 $ 40,189 96% CITY DEPARTMENT TOTAL $ 559,285, 185 $ 660,242,409 $ 629,638,945 $ 14,929,274 $ 15,674,190 98% $ 655,354,255 $ 10,786,036 98% 10 LBRA $ • $ 93,785,149 $ 34,562,849 $ 59,222,301 . 100% $ 93,785,149 $ . 100% GENERAL FUND TOAL $ 559,285,185 $ 754,027,559 $ 664,201,794 $ 74,151,575 $ 15,674,190 98% $ 749,139,405 $ 10,786,036 99% Notes
+ Budget adjustments that do not have revenue or expenditure offsets made in FY21 are excluded here in order to provide information on unfunded overbudget status that were a draw on general funds available. 1 The City Clerk Department's expenditures ended the year $1.03 million under budget (approximately 19.5% of budget) due to overestimated election estimated costs provided by LA County and general savings from not hosting in-person civic engagements for elections and redistricting to comply with COVID-19 health orders. z The City Manager Department exceeded their budget by $62,213, when excluding appropriation increases that were approved without specific offsets. The Department incurred a number of unfunded costs in FY 21 that the City Council approved a Budget Adjustments for that drew down on funds available as an offset These adjustments included unbudgeted cost for compensation to members of Charter Commissions and City Council appointed committee members, Intergovernmental Affairs membership dues, a portion of the Management Assistant Program, and upgrades to the City's licensing system to accommodate shared-use manufacturing licensing type as part of the Cannabis Social Equity Program. The unfunded items are being evaluated for resolution as part of the FY 23 Budget Development process. • Per the required Measure M litigation, the City was required to set aside $6 million of funds into escrow in FY 21. An appropriation increase is requested as part of this report, offset by funds set aside for this purpose. 4 The Economic Development Department exceeded their budget due to unfunded costs associated with the maintenance or beautification of City-owned properties, general administration of the department grant program operations, and the transfer of ineligible grant related expenses from the Community Development Grants Fund to the General Fund. Budget adjustments for these items are requested in this report. s The Fire Department was under budget in the General Fund due to savings in personnel expenses. These salary savings were the result of vacancies in budgeted positions throughout the fiscal year. • The Health and Human Services Department exceeded budget by approximately $2.1 million due to the transfer of funds to the Housing Authority Fund to repay funds that have been deemed as unallowable costs by an audit. This cost will be offset by a release of reserves for liabilities no longer needed for their original purpose. The City has made substantial progress on corrective actions required by the audit in the indirect cost plan allocation methodology to avoid such future repayments.
1 For the Legislative Department, in accordance with normal budgetary practice that provides for end of year Council District operating surplus to be utilized in the future for District Priority Funds, $480,164 is included for reappropriation to Council District Priority Funding. The Mayor's Office and the Third Council District were overbudget by $111,909 and $2,539, respectively. In accordance with normal budgetary practice, these overages will be recovered through equivalent operating budget decreases to these two operations in the FY 22 operating budget a The Police Department came in $3.28 million under budget (approximately 1.3% of budget) largely due to attrition savings in both sworn and civilian positions. Included in their savings, the Department was able to cover costs of key needs related to completing the Public Safety Parking Garage, the Crime Lab and Property Warehouse Leases and funding for vehicles for the newly converted community service assistants to handle priority 3 calls. Projections indicate that their will be sufficient attrition savings to offset costs for the back-to-back Police Academies scheduled for FY 22 and no FY 21 funds need to be set aside for this purpose. • The Parks, Recreation and Marine Department realized savings in the Community Recreation Services Bureau due to program cancellations related to the COVID-19 pandemic. Programs are expected to return in FY22. 10 All savings related to the Long Beach Recovery Act is set aside to carryover to FY22.

ATTACHMENT C

LONG BEACH RECOVERY ACT

EXPENDITURES AND REVENUES BY DEPARTMENT
YEAR-END FY 2021
FY 21 ADJUSTED
BUDGET

ATTACHMENT D
FY21ACTUAL

EXPENDITURES
DEPARTMENT as of 09/30/2021 as of 09/30/2021

EXPENDITURES

GENERAL FUND
CITY ATTORNEY 1
$ $ - -
CITY MANAGER 1,2
$ 650,000 $ 229,872
DEVELOPMENT SERVICES $ 5,060,000 $ -
ECONOMIC DEVELOPMENT $ 29,265,000 $ -
FINANCIAL MANAGEMENT 1,2
$ 250,000 $ 337,228
HEALTH & HUMAN SERVICES $ 16,813,333 $ 197,538
HUMAN RESOURCES 1
$ $ 23,061 -
LIBRARY SERVICES $ 1,205,000 $ -
PARKS, RECREATION AND MARINE $ 1,301,667 $ 35,000
PUBLIC WORKS $ 5,500,000 $ -

TECHNOLOGY & INNOVATION
1 $ $ - -
CITYWIDE ACTIVITIES $ 33,740,149 $ 33,740,149
GENERAL FUND TOTAL $ 93,785,149 $ 34,562,849

OTHER FUNDS
DEVELOPMENT SERVICES $ 61,604,944 $ 16,425,623
HEALTH & HUMAN SERVICES $ 34,417,116 $ 6,436,046
CITYWIDE ACTIVITIES $ 135,753,078 $ 71,785,227
OTHER FUNDS TOTAL $ 231,775,138 $ 94,646,896
EXPENDITURES TOTAL $ 325,560,287 $ 129,209,745
Notes
1 Central Administration Department administrative costs will be allocated to Programs as program expenses are expended. FY 21 administrative costs will begin being allocated to programs in FY 22. 2 These Departments manage programs and also have Central Administrative costs. Programmatic costs will remain in the programs and administrative costs will be allocated to all programs beginning in FY 22.

FY 21 ADJUSTED FY21 ACTUAL

BUDGET REVENUE
DEPARTMENT as of 09/30/2021 as of 09/30/2021

REVENUE

GENERAL FUND
CITYWIDE ACTIVITIES $ (135,753,078) $ (71,785,227)
GENERAL FUND TOTAL $ (135,753,078} $ (71,785,227}

OTHER FUNDS
DEVELOPMENT SERVICES $ (61,604,944) $ (16,425,623)
HEALTH & HUMAN SERVICES $ (34,717,116) $ (6,471,678)
CITYWIDE ACTIVITIES $ (135,753,078) $ (71,908,180)
OTHER FUNDS TOTAL $ (232,075,138} $ (94,805,480}
REVENUE TOTAL $ {367,828,216) $ (166,590,708)
LONG BEACH RECOVERY ACT PROGRAM ALLOCATIONS
ATTACHMENT E
Dept.* Program Title Sub‐Program++ Previous Program
Allocation
New Program
Allocation+
Increase / (Decrease) in
Program Allocation

1. Economic Recovery
Airport Operations
AP Airport Operations **  $            15,131,261   $            15,131,261  ‐ Program Sub‐Total  $            15,131,261   $            15,131, 261  ‐ Clean Cities
PW Corridor Cleanups  $              4,000,000   $              3, 900,000  (100,000) PRM Parks Clean‐Ups  $ ‐     $                  100,000  100,000 Program Sub‐Total  $              4,000,000   $              4,00 0,000  ‐ COVID Protection for Businesses and Non‐Profits
ED
COVID‐19 Protection for Service
Sector Businesses, Non‐Profits &
Workers
**
$            13,000,000   $            13,000,000  ‐
Program Sub‐Total  $            13,000,000   $            13,000, 000  ‐ Direct Business Support
ED
Business Supporting Organization
Technical Assitance Grants
(Business Improvement Districts)
$              1,600,000   $              1,581,068
(18,932)
ED Citywide Small Business Navigator
Grants   $ 250,000   $ 247,042
(2,958)
ED
Customer Activation Grants to
Reopen Local Business and Activate
Consumer Spending
$ 450,000   $ 444,675
(5,325)
ED Direct Grants to Arts and Culture
Businesses  $ 900,000   $ 889,351
(10,649)
ED Direct Grants to Fitness and
Personal Services Sector Businesses  $              4,000,000   $              3,952,671 (47,329)
ED
Direct Grants to Other Businesses
Impacted by
COVID‐19
$              1,600,000   $              1,581,068
(18,932)
ED Direct Grants to Restaurants,
Breweries, and Bars  $              4,000,000   $              3,952,671 (47,329)
ED
Eviction Protection: Commercial
Tenant & Landlord Support
Coordinator
$ 250,000   $ 247,042
(2,958)
DV Expedited Permitting  $ 250,000   $                   250,000  ‐ ED Fee Waivers for Businesses and Non‐
profits  $              2,800,000   $              2,766,870  (33,130) ED Inclusive Business Navigator Grants  $ 250,00 0   $ 247,042  (2,958) ED Non‐Profit Administrative Support
Grants  $              2,400,000   $              2,371,602 (28,398)
ED
Property Activation: Outdoor
Dining, Parklets, Adopt a Business,
Pop‐up Storefronts
$ 450,000   $ 444,675
(5,325)

LONG BEACH RECOVERY ACT PROGRAM ALLOCATIONS
ATTACHMENT E
Dept.* Program Title Sub‐Program++ Previous Program
Allocation
New Program
Allocation+
Increase / (Decrease) in
Program Allocation
ED
Storefront Reopening: Board‐up
Removal, Public Safety,
Beautification & Activation
$ 250,000   $ 247,042
(2,958)
ED Visitor Attraction & Hospitality
Sector Recovery  $              1,125,000   $              1,111,689 (13,311)
Program Sub‐Total  $            20,575,000   $            20,334, 508  (240,492) Economic Inclusion
ED Bridge the Divide (Commercial
Connectivity)  $ 900,000   $ 889,351
(10,649)
ED Bridge the Divide (Residential
Connectivity)  $ 900,000   $ 889,351
(10,649)
ED Business Council for Diverse
Business Owners  $ 250,000   $ 247,042
(2,958)
ED Economic & Digital Inclusion
Coordination   $ 405,000   $ 400,208
(4,792)
ED Economic Empowerment Zones  $              3,000,000   $               2,964,503  (35,497) ED Empowerment Fund Development  $ 450,000   $                   444,675  (5,325) ED Hero Program for Youth Workforce
Development  $ 900,000   $ 889,351
(10,649)
FM Inclusive Procurement Study &
Technical Assistance   $ 250,000   $ 250,000
‐
ED PLA Community Outreach   $ 100,000   $                     98,817  (1,183) ED Service Worker & Customer
Protection Program
**
$ 200,000   $ 200,000  ‐
ED WorkLB: On‐Demand Worker and
Employer Assistance   $ 250,000   $ 247,042
(2,958)
Program Sub‐Total  $              7,605,000   $              7,52 0,340  (84,660) Economic Stability
ED Direct Income Pilot Program  $              1,600,000   $               1,581,068  (18,932) Program Sub‐Total  $              1,600,000   $              1,58 1,068  (18,932) Technical Assistance
ED BizCARE Call Center (570‐4BIZ) and
Popup Locations  $ 250,000   $ 247,042
(2,958)
ED Economic Recovery Study &
Community Reporting   $ 250,000   $ 247,042
(2,958)
Program Sub‐Total  $ 500,000   $                  494,084  (5,916) Transit
PW Micro and Public Transit Pilot
Program  $              1,600,000   $              1,600,000 ‐
Program Sub‐Total  $              1,600,000   $              1,60 0,000  ‐ Economic Recovery Total
Total  $            64,011,261   $            63,661,261  (350,000)

LONG BEACH RECOVERY ACT PROGRAM ALLOCATIONS
ATTACHMENT E
Dept.* Program Title Sub‐Program++ Previous Program
Allocation
New Program
Allocation+
Increase / (Decrease) in
Program Allocation

2. Healthy and Safe Community
Basic Needs
HE Basic Needs Response
Infrastructure  $              1,530,000   $              1,363,630  (166,370) HE Nutrition Security Initiatives  $              3,200,000   $               3,200,000  ‐ HE Older Adults Supports  $ 720,000   $                   720,000  ‐ DV Right to Counsel (Housing Legal
Support)  $ 810,000   $ 810,000
‐
Program Sub‐Total  $              6,260,000   $              6,09 3,630  (166,370) Early Childhood Education and Childcare Supports
HE
Early Childhood
Education and
Childcare
$              2,480,000   $              2,343,333
LS Literacy
Development  $ ‐     $ 95,000
PRM Summer Child Care
Subsidies  $ ‐     $ 41,667
Sub‐Program Sub‐Total  $              2,480,000   $              2,480,000 ‐
LS Increase Community Access to
Library Resources  $ 300,000   $ 300,000
‐
Program Sub‐Total  $              2,780,000   $              2,78 0,000  ‐ Homelessness
HE Case Management **  $ ‐     $              4,735,299  4,735,299 HE Health Department REACH Program
Operations
**
$ 125,000   $ 196,671  71,671
HE Local Alternative Subsidy **  $              3,000,000   $ ‐    (3,000,000) HE Mobile Outreach Station **  $              3,000,000   $              2,453,446  (546,554) HE Mobile Restrooms and Showers **  $ 360,000   $ ‐    (360,000) HE Modular Shelter Units **  $              1,552,500   $              2,855,442  1,302,942 HE Motel Vouchers  $ 450,000   $  210,688  (239,312)
HE PHK Conversion to PSH  $ ‐     $                   853,598  853,598 HE Property Acquisition **  $              2,000,000   $ ‐    (2,000,000) HE Training through Social Enterprise  $ 450,000    $ 535,714  85,714 Program Sub‐Total  $            10,937,500   $            11,840, 858  903,358 Housing Support
DV Additional Down Payment
Assistance  $              3,000,000   $              3,000,000 ‐
DV Emergency Rental Assistance **  $            51,364,086   $            51,364,086  ‐ HE Housing Navigators  $              1,000,000   $              1 ,000,000  ‐ Early Childhood
Education, Childcare, and
Literacy Development

LONG BEACH RECOVERY ACT PROGRAM ALLOCATIONS
ATTACHMENT E
Dept.* Program Title Sub‐Program++ Previous Program
Allocation
New Program
Allocation+
Increase / (Decrease) in
Program Allocation
DV Land Trust  $              1,000,000   $              1,000,000   ‐ Program Sub‐Total  $            56,364,086   $            56,364, 086  ‐ Language Access
CM Language Access / Translation  $ 500,000   $                   350,000  (150,000) Program Sub‐Total  $ 500,000   $                  350,000  (150,000) LB Justice Fund
CM LB Justice Fund  $ 300,000   $                   300,000  ‐ Program Sub‐Total  $ 300,000   $                  300,000  ‐ Physical and Mental Health Equity
HE Addressing Health Disparities **  $              7,700,000   $              7,700,000  ‐ HE Health Equity Fund  $              3,200,000   $              2 ,800,000  (400,000) HE Immigrant Support Services  $ ‐     $ 400,000  400,000 HE Promotora/ Community Health
Champions Program   $ 810,000   $ 810,000  ‐
HE Trauma‐Informed Mental Health
Resources and Response  $ 360,000   $ 526,370
166,370
Program Sub‐Total  $            12,070,000   $            12,236, 370  166,370 Public Health COVID‐19 Response
HE Public Health COVID Response **  $            13,000,000   $            13,500,000  500,000 HE Vaccination Distribution **  $              2,700,000   $              5,118,900  2,418,900 Program Sub‐Total  $            15,700,000   $            18,618, 900  2,918,900 Violence Prevention and Safe Cities
PRM Be SAFE Expansion  $ ‐     $                   110,000  110,000 ED Career Exploration ‐ Exploring
Space Beach  $ ‐
$ 35,000   35,000
HE Community Interventionist Program  $ 450,000   $ 569,050  119,050 HE Increase funding to current building
Youth Social Capital Grantees  $ ‐
$ 60,000   60,000
HE Mental Health Crisis Response Pilot  $ 540,00 0   $ 601,900  61,900 HE
Office of Youth Development ‐
Summer Neighborhood
Engagement
$ ‐
$ 60,000   60,000
HE Re‐Entry Program Pilot  $ 540,000   $                   659,050  119,050 HE Safe Passage ‐ Violence Interruption  $       ‐     $ 100,000  100,000 PRM Teen Program Enhancement  $ ‐      $ 60,000  60,000 LS Youth Academic Programming  $ 810,000   $                   810,000  ‐

LONG BEACH RECOVERY ACT PROGRAM ALLOCATIONS
ATTACHMENT E
Dept.* Program Title Sub‐Program++ Previous Program
Allocation
New Program
Allocation+
Increase / (Decrease) in
Program Allocation
PRM Youth Health and Safety
Programming  $ 990,000   $ 990,000  ‐
HE Youth Life Coaching & Mentoring  $ 300,000   $ ‐    (300,000) Program Sub‐Total  $              3,630,000   $              4,05 5,000  425,000 Healthy and Safe Community Total
Total  $          108,541,586   $          112,638,844  4,097,258

3. Securing Our City's Future
Maintaining Services for Residents and Businesses
XC Cover FY 22 Shortfall  $            30,000,000   $            3 0,000,000  ‐ XC Eliminating Furloughs  $              5,200,000   $               5,200,000  ‐ Program Sub‐Total  $            35,200,000   $            35,200, 000  ‐ Replenishing Reserves
XC Replenish Reserves  $            41,500,000   $            40,5 08,078  (991,922) Program Sub‐Total  $            41,500,000   $            40,508, 078  (991,922) Securing Our City's Future Total
Total  $            76,700,000   $            75,708,078  (991,922) LONG BEACH RECOVERY ACT TOTAL +
Grand Total  $          249,252,847   $          252,008,183  2,755,336 + An allocation of approximately 16% will be applied to each program for administrative expenses to ensure the proper program development, program implementation, and report coordination to ensure compliance with funding requirements. ++ Sub‐Programs are still being identified and designed.  Once established, sub‐programs will be disclosed in a future report to City Council. * AP = Airport Department, CM = City Manager's Office, DV = Development Services Department, ED  = Economic Development Department, FM = Financial Management Department, HE = Health and Human Services Department, LS = Library Services Department, PD = Police Department, PRM = Parks, Recreation and Marine Department, and PW = Public Works Department. ** These programs are funded by v
arious grants that allow for only specific types of expenditures.