CITY OF Department of Financial Management
411 West Ocean Boulevard, 6 Floor
LONGBEACH Long Beach, CA 90802
September 6, 2022 BH-13
HONORABLE MAYOR AND CITY COUNCIL
City of Long Beach
California
RECOMMENDATION:
Receive supporting documentation into the record, conclude the public hearing, and take the actions necessary to adopt the Fiscal Year 2023 budget as listed in Attachment A. (Citywide)
DISCUSSION
On August 2, 2022, the City Manager's Proposed Budget for Fiscal Year 2023 (FY 23) was delivered by Mayor Garcia to the City Council and the community for consideration. The City Council budget hearings were held on December 7, 2021, as well as on March 8, August 2, August 9, August 16, August 23, and September 6, 2022. Additionally, Budget Oversight Committee (BOC) meetings and citywide community town hall meetings were also held in the months of January and August 2022, at which the Proposed FY 23 Budget was discussed. As a result of these meetings, there were 17 scheduled opportunities for public feedback, deliberation, and input. Additionally, input was solicited through the Long Beach Budget Priority Survey to obtain feedback on desired City priorities. The survey was promoted on the City of Long Beach (City) website, Twitter, Instagram, Facebook, and at community meetings.
At the conclusion of the September 6, 2022 hearing, the City Council will amend the Proposed FY 23 Budget as it deems appropriate and adopt the proposed budget as amended. Since the publication of the Proposed FY 23 Budget, a few updates were made to the proposed revenue and expenditure budgets, which primarily address technical corrections and are listed by fund group and department in Attachments B, C, and D. The reasons for these budget adjustments are discussed at the end of this letter.
As part of the FY 23 Budget Adoption, there are two Ordinances to be considered for approval in Attachment A. The first Ordinance amends the Departmental Organization of the City (A-6).
The second is the Appropriations Ordinance (A-15), which officially appropriates the funding for the Adopted Budget (approved in A-3) and authorizes expenditures in conformance with the Adopted Budget. For the Appropriations Ordinance to become effective on October 1, 2022, the City Council must first declare an emergency to exist (A-14) before adopting the Ordinance.
Historically, the City Council declares an Ordinance to approve a Resolution establishing the rates and charges for the water and sewer services as part of the budget adoption actions. This year, on May 10, 2022, the City Council approved said Ordinance and because no further changes to water or sewer rates are being proposed, there is no need for the ordinance to be declared again with the FY 23 budget adoption actions.
There are also five Resolutions to approve the budget for the Long Beach Harbor Department (A-8); approve the budget for the Water Department (A-9); approve the Master Fees and Charges Schedule (A-4); establish the Gann Appropriations Limit (A-12); and amend the Salary
HONORABLE MAYOR AND CITY COUNCIL
September 6, 2022
Resolution (A-7). There are also the following motions: approve the FY 23 One-Year Capital Improvement Program (A-5); approve the FY 23 Budget for the Long Beach Community Investment Company (A-10); approve the Harbor Fund Group transfer (A-11); approve the amended Financial Policies (A-13); approve the Mayor's Recommendations (A-1); approve the BOC Proposed Funding Recommendations (A-2); and amend the Proposed FY 23 Budget (A- 3).
This matter was reviewed by Deputy City Attorney Monica Kilaita on August 16, 2022, and by Budget Manager Grace H. Yoon on August 9, 2022.
TIMING CONSIDERATIONS
In accordance with the City Charter, the Proposed FY 23 Budget must be adopted by September 15, 2022. Should the City Council fail to adopt the budget by that date, the City Manager's Proposed FY 23 Budget will be deemed the budget for the 2023 Fiscal Year. The Mayor has five calendar days from the City Council adoption of the budget to use his veto authority. The City Council would then have until September 30, 2022, to override the veto action by the Mayor with a two-thirds supermajority vote (six Councilmembers).
FISCAL IMPACT
The City Charter requires that the Appropriations Ordinance govern and control the expenditure and commitment amounts stated therein relating to City departments, offices, and agencies during each fiscal year. The total Proposed FY 23 Budget for all departments and fund groups is $4,088,571,947, which comprises of $3,177,225,467 in new appropriation and $911,346,480 in estimated carryover from FY 22 for multi-year grants and projects. Attachments B, C, and D provide the financial overview by Fund Group and Department, and Citywide revenue by Fund Group, respectively.
The Appropriations Ordinance, included as Attachment A-15, totals $3,267,581,693 for all fund groups except Harbor, Sewer, and Water fund groups, and $3,269,788,542 for all departments except Harbor and Water Departments. The $2,206,850 difference between fund groups and departments is due to general City indirect costs budgeted in the Financial Management Department but charged to the Harbor, Water, and Sewer Funds, which are not included in the Appropriations Ordinance by fund groups.
The proposed Harbor, Water, and Sewer Fund Group budgets are in separate City Council Resolutions included as Attachment A-8 and A-9, respectively, and total $820,990,254. The Board of Harbor Commissioners adopted the budget for the Harbor Department by minute order on May 23, 2022. The Board of Water Commissioners adopted the budget for the Water Department by Resolution on June 23, 2022.
User fees and charges in the Master Fees and Charges Schedule, included as Attachment A- 4, have been adjusted due to changes in service and other factors. For details regarding these proposed new fees and adjustments, please see the List of Proposed Fees Adjustments for FY 23 that has been incorporated as Exhibits B and C to the Master Fees and Charges Resolution.
HONORABLE MAYOR AND CITY COUNCIL
September 6, 2022
Other requested City Council actions include:
• Approving the FY 23 One-Year Capital Improvement Program (CIP) budget, included as Attachment A-5, which is contained in the Appropriations Ordinance. • Amending the Departmental Organization Ordinance included as Attachment A-6. This amendment incorporates changes to departments, bureaus, and divisions for FY 23.
These organizational changes are necessary to implement changes reflected in the Proposed FY 23 Budget. A redline version of the changes is also provided. • Adopting the amended Salary Resolution for FY 23, which creates and establishes positions of employment while fixing and prescribing the compensation for officers and employees, is included as Attachment A-7. Historically, the Salary Schedule has been included alongside the Salary Resolution, for review by the City Council. This year the Department of Human Resources will return to the City Council at a later date for approval of the Salary Schedule to ensure accuracy and inclusion of new/updated classifications.
• Adopting the FY 23 Long Beach Community Investment Company (LBCIC) budget, included as Attachment A-10. The LBCIC budget is prepared annually for City Council approval and is a subset of the Housing Development Fund. The LBCIC oversees the delivery of housing and neighborhood revitalization services. The LBCIC approved its FY 23 Budget on May 18, 2022.
• Adopting a Resolution, included as Attachment A-12, establishing the Gann Appropriations Limit (Limit) for general purpose expenditures. In November 1979, the voters of the State of California (State) approved Proposition 4, also known as the Gann Initiative (Initiative). The Initiative places certain limits on the amount of tax revenue that can be appropriated each fiscal year. The Limit is based on actual appropriations during FY 79 and prevents overspending proceeds of taxes. Only those revenues that are considered as "proceeds of taxes" are subject to the Limit. The Limit is recalculated each fiscal year based on certain inflation and population factors provided by the State.
The Proposed Budget includes tax revenue estimates that are at 45.38 percent of the 2022-2023 Appropriations Limit and, therefore, do not exceed the Limit. The City Auditor reviews this calculation for conformance to the law. • Adopting the amended Financial Policies for the City, included as Attachment A-13.
Changes have been made to the Revenue Projection Policy (Policy 10), which adjusts the Revenue Estimation Methodology from Reasonably Conservative to Reasonably Expected.
After the City Manager delivered the Proposed FY 23 Budget to the Mayor, technical adjustments were made to complete the budget. These changes are shown in Attachments B, C, and D. Changes include the following:
HONORABLE MAYOR AND CITY COUNCIL
September 6, 2022
1. An expense decrease in the Energy Resources Department in the SERRF Fund Group of $49,342 as a technical correction to align the budget more accurately with anticipated expenditures in FY 23.
2. A revenue decrease in the Public Works Department in the Refuse and Recycling Fund Group by $3,826,066 to adjust the budget to align with the anticipated impacts of the proposed rate increase to Solid Waste and Recycling fees.
3. An expense decrease of $1,930,776 and a revenue increase of $25,000 in the Development Services Department in the Community Development Grants Fund Group as a technical correction to align anticipated expense and revenue to actuals for multiyear grant reimbursements in FY 23.
The remaining changes were minor, technical adjustments made to various funds and departments resulting in no bottom line changes at the fund level.
This recommendation has no staffing impact beyond the normal budgeted scope of duties and is consistent with existing City Council priorities. There is no local job impact associated with this recommendation.
SUGGESTED ACTION:
Approve recommendation.
Respectfully submitted, APPROVED:
Kevi Ripu
KEVIN RIPER THOMAS B. MODICA
DIRECTOR OF FINANCIAL MANAGEMENT CITY MANAGER
ATTACHMENTS
ATTACHMENT A
List of Requested Fiscal Year 2023 Budget Adoption Actions Adopt the Mayor's proposed budget recommendations, as amended, to the Proposed FY 23 Budget. (A-1)
2. Adopt the Budget Oversight Committee's proposed funding recommendations, as amended, to the Proposed FY 23 Budget. (A-2)
3. Adopt the expenditures and revenues as identified in the Proposed FY 23 Budget, as amended. (A-3)
4. Adopt the Resolution amending the Master Fees and Charges Schedule for specified City services for Citywide fees and charges for the City of Long Beach. (A-4)
5. Approve the FY 23 One-Year Capital Improvement Program. (A-5)
6. Declare the Ordinance amending the Departmental Organization Ordinance read the first time and laid over to the next regular meeting of the City Council for final reading. (A-6)
7. Adopt the amended Salary Resolution for FY 23. (A-7)
8. Adopt the Resolution approving the FY 23 budget for the Long Beach Harbor Department as adopted by the Board of Harbor Commissioners on May 23, 2022. (A-8)
9. Adopt the Resolution approving the FY 23 budget of the Long Beach Water Department as adopted by the Board of Water Commissioners on June 23, 2022. (A-9)
10. Adopt a motion approving the FY 23 budget for the Long Beach Community Investment Company in the amount of $14,085,000. (A-10)
• 11. Adopt a motion approving the estimated transfer of $22,786,322 from the Harbor Fund Group to the Tidelands Operations Fund Group. (A-11)
12. Adopt the Resolution establishing the Gann Appropriations Limit for FY 23 pursuant to Article XIII (B) of the California Constitution. (A-12)
13. Adopt a motion approving the Financial Policies, as amended. (A-13)
14. Declare an emergency to exist. (A-14)
15. Declare the Appropriations Ordinance for FY 23, creating and establishing the fund groups of the Municipal Government and appropriating money to and authorizing expenditures from said funds and for said fiscal year as an Emergency Ordinance, read, and adopted as read and laid over to the next regular meeting of the City Council for final reading. (A-15)
ATTACHMENT B
FISCAL YEAR 2023 APPROPRIATIONS ORDINANCE BY FUND GROUP (Does not include Harbor, Water and Sewer Fund Groups)
FY 23 PROPOSED FY 22 ESTIMATED FY 23
FUND GROUP EXPENDITURES CHANGES* CARRYOVER* APPROPRIATIONS GENERAL FUND 669,663,209 669,663,209
UPLAND OIL FUND 9,352,752 9,352,752
GENERAL GRANTS FUND 9,962,155 55,975,057 65,937,212
POLICE & FIRE PUBLIC SAFETY OIL PROD ACT FUND 2,693,369 2,693,369 HEALTH FUND 61744,391 79,687,415 141,432,307
CUPA FUND 2,808,924 2,808,924
SPECIAL ADVERTISING & PROMOTION FUND 11,555,107 - 11,555,107 HOUSING DEVELOPMENT FUND 16,000,104 5,521,505 21,521,610 BELMONT SHORE PARKING METER FUND 786,388 786,388
BUSINESS ASSISTANCE FUND 756,036 - 3,611,418 4,367,454
COMMUNITY DEVELOPMENT GRANTS FUND 18,615,453 (1,930,776) 50,982,198 67,666,874 HOUSING AUTHORITY FUND 108,252,290 7,497,681 115,749,972 GASOLINE TAX STREET IMPROVEMENT FUND 14,139,365 10,766,569 24,905,933 CAPITAL PROJECTS FUND 175,830,408 478,584,363 654,414,772 SUCCESSOR AGENCY OPERATIONS 4,248,628 27,749,468 31,998,096 CIVIC CENTER FUND 24,102,627 1,761,484 25,864,111
GENERAL SERVICES FUND 74,747,226 18,396,319 93,143,545
FLEET SERVICES FUND 50,478,684 4,037,711 54,516,395
INSURANCE FUND 67,547,362 67,547,362
EMPLOYEE BENEFITS FUND 389,690,381 389,690,381
TIDELANDS OPERATIONS FUND 113,192,489 87,570,506 200,762,995 TIDELANDS AREA FUNDS 32,864,381 19,861,771 52,726,152
TIDELANDS OIL REVENUE FUND 90,037,870 90,037,870
RESERVE FOR SUBSIDENCE
DEVELOPMENT SERVICES FUND 30,222,823 (425,687) 29,797,135 GAS FUND 167,147,399 22,384,350 189,531,749
AIRPORT FUND 53,715,400 37,320,898 91,036,299
REFUSE/RECYCLING FUND 67,121,695 63,453 67,185,148
SERRF FUND 49,113,263 (49,342) - 49,063,921
SERRF JPA FUND
TOWING FUND 6,945,988 - 6,945,988
DEBT SERVICE FUND 8,134,944 8,134,944
SUCCESSOR AGENCY - DEBT SERVICE 26,743,719 26,743,719
TOTAL 2,358,215,331 (1,980,118) 911,346,480 3,267,581,693 *Please refer to the Fiscal Impact section of the City Council Letter for a general description of notable changes. **Reflects estimated carryover for accounts with projects and grants as of 5/31/22.
FY 23 Fund Attachment B 8/12/2022
ATTACHMENT C
FISCAL YEAR 2023 APPROPRIATIONS ORDINANCE BY DEPARTMENT (Does not include Harbor and Water Departments)
FY 23 PROPOSED FY 22 ESTIMATED FY 23
DEPARTMENT EXPENDITURES CHANGES* CARRYOVER** APPROPRIATIONS MAYOR AND COUNCIL 6,157,142 138) 6,157,004
CITY ATTORNEY 12,792,312 12,792,312
CITY AUDITOR 3,450,581 3,450,581
CITY CLERK 4,205,416 4,205,416
CITY MANAGER 19,116,930 1,442,277 20,559,207
CITY PROSECUTOR 6,554,887 1,556,596 8,111,483
CIVIL SERVICE 3,715,317 - 3,715,317
AIRPORT 53,262,491 36,794,196 90,056,687
DISASTER PREPAREDNESS &
EMERGENCY COMMUNICATIONS 13,863,912 - 1,235,426 15,099,338 DEVELOPMENT SERVICES 92,150,228 (1,930,776) 81,956,929 172,176,381 ECONOMIC DEVELOPMENT 22,821,694 12,092,461 34,914,154
FINANCIAL MANAGEMENT** 729,844,020 105,379,333 835,223,353 FIRE 153,467,070 3,405,592 156,872,662
HEALTH AND HUMAN SERVICES 182,091,970 87,210,542 269,302,512 HUMAN RESOURCES 25,270,577 (678,337) 24,592,240
LIBRARY SERVICES 18,102,153 4,974,134 23,076,286
ENERGY RESOURCES 267,529,467 (49,342) 22,384,350 289,864,475 PARKS, RECREATION AND MARINE 74,030,641 27,193,075 101,223,716 POLICE 293,003,779 8,968,565 301,972,345
PUBLIC WORKS 308,971,291 497,687,774 806,659,065
TECHNOLOGY & INNOVATION 70,020,303 . 19,743,704 89,764,008 TOTAL 2,360,422, 180 (1,980,118) 911,346,480 3,269,788,542 *Please refer to the Fiscal Impáct section of the City Council Letter for a general description of notablé changes. **Reflects estimated carryover for accounts with projects and grants as of 5/31/22. ***Department of Financial Management includes internal service charges that are contained in the resolutions of the Harbor, Water, and Sewer Fund Groups for accounting, budgeting and treasury functions, and other citywide activities such as debt service.
FY 23 Dept Attachment C 8/12/2022
ATTACHMENT D
FISCAL YEAR 2023 REVENUES BY FUND GROUP
(Does not include Harbor, Water and Sewer Fund Groups)
FUND GROUP FY 23 PROPOSED. CHANGES: FY 23 PROPOSED
REVENUES BUDGETED
REVENUES
GENERAL FUND 621,283,066 621,283,066
UPLAND OIL FUND 11,811,475 11,811,475
GENERAL GRANTS FUND 9,701,912 9,701,912
POLICE & FIRE PUBLIC SAFETY OIL PROD ACT FUND 2,693,369 2,693,369 HEALTH FUND 61,770,617 61,770,617
SPECIAL ADVERTISING & PROMOTION FUND 8,584,444 8,584,444 HOUSING DEVELOPMENT FUND 15,237,500 15,237,500
BELMONT SHORE PARKING METER FUND 898,884 898,884
BUSINESS ASSISTANCE FUND 728,199 728,199
COMMUNITY DEVELOPMENT GRANTS FUND 10,691,548 25,000 10,716,548 GASOLINE TAX STREET IMPROVEMENT FUND 13,491,359 13,491,359 CAPITAL PROJECTS FUND 171,610,605 : 171,610,605
CIVIC CENTER FUND 24,975,297 24,975,297
GENERAL SERVICES FUND 74,592,189 74,592,189
FLEET SERVICES FUND 56,958,170 56,958,170
INSURANCE FUND 76,808,762 76,808,762
EMPLOYEE BENEFITS FUND 390,119,981 390,119,981
TIDELANDS OPERATIONS FUND 110,893,919 110,893,919
TIDELANDS AREA FUNDS 30,242,344 30,242,344
TIDELANDS OIL REVENUE FUND 98,787,714 98,787,714
RESERVE FOR SUBSIDENCE 980,000 980,000
DEVELOPMENT SERVICES FUND 30,462,627 30,462,627
GAS FUND 165,712,559 - 165,712,559
GAS PREPAY FUND
AIRPORT FUND 61,065,806 61,065,806
REFUSE/RECYCLING FUND 77,200,000 (3,826,066) 73,373,934 SERRF FUND 43,794,850 43,794,850
SERRE JPA FUND
:
TOWING FUND 7,256,458 7,256,458
HOUSING AUTHORITY FUND 105,236,185 105,236,185
SUCCESSOR AGENCY OPERATIONS 4,219,567 4,219,567
CUPA FUND 1,866,016 1,866,016
DEBT SERVICE FUND 6,543,779 6,543,779
SUCCESSOR AGENCY DEBT SERVICE 30,162,041 - 30,162,041
TOTAL 2,326,381,241 (3,801,066) 2,322,580,175
*Please refer to the Fiscal Impact section of the City Council Letter for a general description of notable changes.
FY22 Fund Attachment D- REVENUE 8/12/2022
BH-13.12
1 RESOLUTION NO.
2 3 A RESOLUTION OF THE CITY COUNCIL OF THE
4 CITY OF LONG BEACH ADOPTING AN APPROPRIATIONS
5 LIMIT FOR THE CITY OF LONG BEACH FOR THE 2022-2023
6 FISCAL YEAR PURSUANT TO ARTICLE XIII(B) OF THE
7 CALIFORNIA CONSTITUTION
8 9 WHEREAS, Article XIII(B) of the California Constitution provides for an 10 annual appropriations limit for state and local governments beginning with the 1980-81 11 fiscal year, based on 1978-79 appropriations, as adjusted for specified annual changes in 12 population and inflation; and
13 WHEREAS, Section 7910 of the Government Code also provides that fifteen 14 1(15) days prior to such meeting, documentation used in the determination of the OFFICE OF THE CITY ATTORNEY CHARLES PARKIN, City Attorney 411 West Ocean Boulevard, 9th Floor Long Beach, CA 90802-4664 15 appropriations limit shall be available to the public; and that each year the City Council 16 shall, by resolution, establish the appropriations limit for the City of Long Beach for the 17 following fiscal year; and
18 WHEREAS, Proposition 111 subsequently amended Article XIII(B) of the 19 California Constitution to provide for certain revisions in the population and inflation factors 20 used in the calculation of the appropriations limit and to provide for a recalculation of the 21 appropriation limit date for the years 1987-88 through 1990-91; and 22 WHEREAS, Proposition 111 provided that one factor that may be used in the 23 calculation of the appropriations limit is the increase in local non-residential assessed value 24 due to new construction; and
25 WHEREAS, the documentation which is attached hereto and made a part 26 hereof as Exhibit "A" was used in the determination of the appropriations limit for the 2022- 27 2023 fiscal year, and has been available for public inspection in the office of the City Clerk 28 since August 2, 2022;
1 1JK:bg A22-02457 (07-29-2022
1420130.DOC)
1 NOW, THEREFORE, the City Council of the City of Long Beach resolves as 2 follows:
3 Section 1. The appropriations limit for the City of Long Beach for fiscal 4 year 2022-2023 shall be $929,760,175.
5 Section 2. This resolution shall take effect immediately upon its adoption 6 by the City Council, and the City Clerk shall certify the vote adopting this resolution. 7 I hereby certify that the foregoing resolution was adopted by the City Council of the City of Long Beach at its meeting of _, 2022, by the 9 following vote:
10 11 Ayes: Councilmembers:
12 CA 90802-4664 13
THE CITY ATTORNEY
14 CHARLES PARKIN, City Attorney 411 West Ocean Boulevard, 9th Floor 15 Noes: Councilmembers:
Long Beach,
16 17 Absent: Councilmembers:
18 19 Councilmembers:
Recusal(s):
20 21
22 City Clerk
23 24
25 26
27 28
2 1JK:bg A22-02457 (07-29-202
420130.DOC
"EXHIBIT A"
CITY OF LONG BEACH
1. DETERMINATION OF FISCAL YEAR 2022 - 2023
APPROPRIATIONS LIMIT
Based On Budgeted Revenues
2021 - 2022 Appropriations Limit: $862,765,566
Adjustment Factor (See Below): 1.077651
2022 - 2023 Appropriations Limit: $929,760,175
II. DETERMINATION OF APPROPRIATIONS FACTOR
Price Factor: 1.075500
Change in Per Capita Income
Department of Finance estimate pursuant
to Revenue Tax Code, Sec. 2227 and 2228,
California =
Ratio = (7.55+100)/100 = 1.0755
Population Change: 0.20%
Department of Finance estimate pursuan
to Revenue Tax Code, Sec. 2227 and 2228
California =
Ratio = (.20+100)/100 =
Adjustment Factor: 1.077651
1.0755 x 1.002
Factors were converted to ratios
per State guidelines.
III. DETERMINATION OF FISCAL YEAR 2022 - 2023
CALCULABLE REVENUE PERCENTAGE
OF APPROPRIATIONS LIMIT
Appropriated Tax Revenue: 472,345,646
Actual calculable revenue applied
towards Appropriations Limit
Exclusions From Taxable Proceeds ($50,444,907)
Revised Appropriated Tax Revenue 421,900,738
2022 - 2023 Appropriations Limit: $929,760,175
Variance Between Revenue And Limit $507,859,437
2022 - 2023 Percentage of Appropriations Limit: 45.38%
Prepared July 25, 2022
Budget Management Bureau
FY 23 GANN Appropriation Calculation.xlsx 7/26/2022