Department of Financial Management
411 West Ocean Boulevard, 6th Floor
Long Beach, CA 90802
(562) 570-6425
June 6, 2023
HONORABLE MAYOR AND CITY COUNCIL
City of Long Beach
California
RECOMMENDATION:
Adopt a Resolution requesting that the Board of Harbor Commissioners approve the transfer of 5 percent of Fiscal Year 2023 (FY 23) gross operating revenue, from the Harbor Fund Group to the Tidelands Operati ng Fund Group, with a true -up adjustment, if necessary, to reflect the final gross revenue amount upon issuance of the Harbor Department’s FY 23 audited financial statements. (Districts 1, 2, 3)
DISCUSSION
City Charter Section 1209(c)(4) provides for the transfer of a maximum of 5 percent of Harbor Department gross operating revenue. The Charter provides that the City Council, by a two-thirds (2/3) vote expressed by Resolution, may request the transfer in or der to meet the lawful obliga tions of the Tidelands Operating Fund Group. The provision requires a majority vote of the Board of Harbor Commissioners, expressed by Resolution, to enact the transfer, determining that the funds will not be needed for Harbor Department operations. The Harbor Department Proposed FY 24 Budget, approved by the Board of Harbor Commissioners, will include a transfer amount calculated on 5 percent of FY 2 3 operating revenue, which is currently estimated at $ 24,122,500. This amount i s approximately a 5 percent increase from the transfer amount to be received for the previous fiscal year. Approval of the transfer to the Tidelands Operating Fund Group will be considered by the Board of Harbor Commissioners as a separate budget action in response to this formal request by the City Council.
Tidelands Fund Requirements
Department operating revenues generated in the Tidelands area (parking, leases, service agreements, etc.) and Tidelands oil revenue are insufficient to fund Tidelands operations.
The Harbor revenue transfer is a critical funding source for Tidelands operations citywide, including support for lifeguards, waterfront maintenance and operations, the Convention Center, and annual debt service payments on City bonds issued for the Aquarium.
This matter was reviewed by Deputy City Attorney Monica J. Kilaita and Budget Analysis Officer Greg Sorensen on May 3, 2023.
R-25
HONORABLE MAYOR AND CITY COUNCIL
June 6, 2023
TIMING CONSIDERATIONS
Authority to transfer the funds must be expressed by Resolutio n (attached). Since the adoption of the FY 24 Tidelands budget is dependent upon the annual transfer, the City Council and Board of Harbor Commissioners must adopt Resolutions prior to the City Council’s adoption of the FY 2 4 Budget, which includes the budget of the Harbor Department. City Council approval is requested on June 6, 2023 to allow time for the FY 23 transfer of 5 percent of gross operating revenue to be approved by the Board of Harbor Commissioners for the Proposed FY 24 Budget.
FISCAL IMPACT
The transfer of 5 percent of FY 23 gross operating revenue from the Harbor Fund Group to the Tidelands Operating Fund Group will be included in the City Manager’s Proposed FY 24 Budget to support Tidelands operations and debt service. The transfer amount will be paid quarterly and will be based on the actual operating revenues reported in the Harbor Department’s FY 2 3 audited financial statements. This recommendation has no staffing impact beyond the normal budgeted scope of duties and is consistent with existing City Council priorities. There is no fiscal or local job impact associated with this recommendation.
SUGGESTED ACTION:
Approve recommendation.
Respectfully submitted,
KEVIN RIPER
DIRECTOR
FINANCIAL MANAGEMENT
ATTACHMENT - RESOLUTION
APPROVED:
THOMAS B. MODICA
CITY MANAGER
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OFFICE OF THE CITY ATTORNEY
DAWN MCINTOSH, City Attorney
411 W. Ocean Boulevard, 9th Floor
Long Beach, CA 90802
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF LONG BEACH REQUESTING THE BOARD OF
HARBOR COMMISSIONERS OF THE CITY OF LONG
BEACH TO APPROVE A TRANSFER FROM THE HARBOR
FUND GROUP TO THE TIDELANDS OPERATIONS FUND
GROUP PURSUANT TO THE PROVISIONS OF CITY
CHARTER SECTION 1209(C)(4)
WHEREAS, City Charter Section 1209(c)(4) authorizes the transfer of monies deposited to the credit of the Harbor Fund Group to the Tidelands Operations Fund Group under certain conditions; and
WHEREAS, the City Council finds and determines that a transfer of funds from the Harbor Fund Group to the Tidelands Operations Fund Group is required to meet the lawful obligations of the Tidelands Operations Fund Group; and WHEREAS, City Charter Section 1209(c)(4) provides for the transfer of a maximum of five percent (5%) of the gross operating revenues of the Harbor Department; NOW, THEREFORE, the City Council of the City of Long Beach resolves as follows:
Section 1. A transfer of funds from the Harbor Fund Group to the Tidelands Operations Fund Group is required to meet the lawful obligations of the Tidelands Operations Fund Group.
Section 2. That five percent (5%) of the gross operating revenues of the Harbor Department be transferred to the Tidelands Operations Fund Group.
Section 3. The transfer is being requested quarterly with a reconciliation, as necessary, to reflect he actual operating revenues reported in the Harbor Department’s Fiscal Year 2023 audited financial statements.
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OFFICE OF THE CITY ATTORNEY
DAWN MCINTOSH, City Attorney
411 W. Ocean Boulevard, 9th Floor
Long Beach, CA 90802
Section 4. The City Council by a vote of two-thirds (2/3) of all its members requests that the Board of Harbor Commissioners approve the transfer of five percent (5%) of the gross operating revenues (estimated at approximately Twenty-Four Million One Hundred Twenty-Two Thousand Five Hundred Dollars ($24,122,500) based upon the Harbor Department’s FY23 audited financial statement amount) from the Harbor Fund Group to the Tidelands Operations Fund Group, which transfer shall be made by journal entry on the books of the City of Long Beach.
Section 5. This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting this resolution.
I hereby certify that the foregoing resolution was adopted by the City Council of the City of Long Beach at its meeting of _________________________, 2023 by the following vote:
Ayes: Councilmembers:
Noes: Councilmembers:
Absent: Councilmembers:
Recusal(s): Councilmembers:
City Clerk