Department of Financial Management
411 West Ocean Boulevard, 6th Floor
Long Beach, CA 90802
(562) 570-6425
September 5, 2023
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 2024 budget as listed in Attachment A. (Citywide)
DISCUSSION
On August 1, 2023, the City Manager’s Proposed Budget for Fiscal Year 202 4 (FY 24) was delivered by Mayor Richardson to the City Council and the community for consideration. The City Council budget hearings were held on January 17, March 7, August 1, August 8, August 15, Augus t 2 2, and September 5, 2023. Additionally, Budget Oversight Committee (BOC) meetings and citywide community town hall meetings were also held in the months of January, February, July, and August 2023, at which the Proposed FY 2 4 Budget was discussed. As a result of these meetings, there were 24 scheduled opportunities for public feedback, deliberation, and input. Additionally, FY 24 budget input was solicited through the Long Beach Budget Priority Survey in January and the Digital Budget Comment Card in August to obtain feedback on desired City priorities and input on the FY 24 Proposed Budget . Both the survey and the comment card were promoted on the City’s website, X (formally Twitter), Instagram, Facebook, Reddit, Nextdoor, and at community meetings.
At the conclusion of the September 5, 2023 Budget Hearing, the City Council will amend the Proposed FY 24 Budget as it deems appropriate and adopt the proposed budget as amended.
Since the publication of the Proposed FY 24 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 the se budget adjustments are discussed at the end of this letter.
As part of the FY 24 Budget Adoption, there are three Ordinances to be considered for approval in Attachment A. The first Ordinance amends the Departmental Organization of the City (A-6).
The second Ordinance approves Resolution No. UT-1482 (A-10), which establishes the rates and charges for the water, sewer, and gas services. The third is the Appropriations Ordinance (A-16), which officially appropriates the funding for the Adopted Budget (approved in A-3) and authorizes expenditures in conformance with the Adopted Budget. For the second and third Ordinances to become effective on October 1, 2023, the City Council must first declare an emergency to exist before adopting each Ordinance (A-9 and A-15).
There are also five Resolutions to approve the Master Fees and Charges Schedule (A -4); amend the Salary Resolution (A-7); approve the budget for the Long Beach Harbor Department (A-8); approve the budget for the Utilities Department (A -11); and establish the Gann Appropriations Limit (A -14). There are also the following motions: approve the Mayor’s BH-27.12
HONORABLE MAYOR AND CITY COUNCIL
September 5, 2023
Recommendations (A -1); approve the BOC Proposed Funding Recommendations (A -2); amend the Proposed FY 24 Budget (A -3); approve the FY 24 One-Year Capital Improvement Program (A -5); approve the FY 2 4 Budget for the Long Beach Community Investment Company (A-12); and approve the Harbor Fund Group transfer (A-13).
This matter was reviewed by Deputy City Attorney Monica Kilaita on August 16, 2023 and by Budget Manager Grace H. Yoon on August 15, 2023.
TIMING CONSIDERATIONS
In accordance with the City Charter, the Proposed FY 2 4 Budget must be adopted by September 15, 2023. Should the City Council fail to adopt the budget by that date, the City Manager’s Proposed FY 24 Budget will be deemed the budget for the 2024 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, 20 23, 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 24 Budget for all departments and fund groups is $ 4,264,914,347, which comprises of $ 3,239,989,594 in new appropriation and $1,024,924,753 in estimated carryover from FY 23 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-16, totals $3,339,734,767 for all Fund Groups except Harbor, Sewer, Water , and Gas Fund Groups, and $ 3,344,564,651 for all departments except Harbor and Utilities Departments. The $4,829,884 difference between Fund Groups and Departments is due to general City indirect costs budge ted in the Financial Management Department but charged to the Harbor, Water , Sewer, and Gas Fund Groups, which are not included in the Appropriations Ordinance by Fund Group.
The proposed Harbor, Water , Sewer, and Gas Fund Group budgets are in separate City Council Resolutions included as Attachment A -8 and A -11, respectively , and total $925,179,581. This total figure reflects what is in the budget system, which may vary from the figures included in the resolutions , which allow for adjustments to be made to the adopted budget in an amount not exceeding five (5) percent. The final budgets are $608,416,908 for the Harbor Fund Budget, $162,465,645 for the Water Fund, $23,564,028 for the Sewer Fund, and $130,733,000 for the Gas Fund. The Board of Harbor Commissioners adopted the budget for the Harbor Department by minute order on June 12, 2023 . The Board of Utilities Commissioners ado pted the budget for the Utilities Department by Resolution on June 26, 2023.
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
HONORABLE MAYOR AND CITY COUNCIL
September 5, 2023
proposed new fees and adjustments, please see the List of Proposed Fees Adjustments for FY 24 that has been incorporated as Exhibits B and C to the Master Fees and Charges Resolution.
Other requested City Council actions include:
• Approving the FY 2 4 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 2 4.
These organizational changes are necessary to implement changes reflected in the Proposed FY 24 Budget. A redline version of the changes is also provided.
• Adopting the amended Salary Resolution for FY 2 4, 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 Council. Starting in FY 23, the Department of Human Resources will return to City Council at a later date for approval of the Salary Schedule to ensure accuracy and inclusion of new/updated classifications.
• Adopting the FY 2 4 Long Beach Community Investment Company (LBCIC) budget, included as Attachment A-12. 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 24 Budget on May 17, 2023.
• Adopting a Resolution, included as Attachment A -14, 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 47.95 percent of the 2023-2024 Appropriations Limit and, therefore, do not exceed the Limit . The City Auditor reviews this calculation for conformance to the law.
After the City Manager delivered the Proposed FY 2 4 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:
1. An expense and revenue decrease of $16,195 in the Public Works Department in the Capital Projects Fund Group as a correction to align with CDBG FY 24 Action Plan 24.
2. An expense decrease in the Airport Department in the Capital Projects Fund Group of $52,449 as a technical correction to align personnel budgeting to project budgeting.
HONORABLE MAYOR AND CITY COUNCIL
September 5, 2023
3. An expense increase in the Health and Human Services Department in the Health Fund Group of $23,890 as a technical correction for the sidewalk vending program fleet vehicle purchase expenditure in FY 24.
The remaining changes were minor, technical adjustments made to variou s funds and departments resulting in no bottom line changes at the fund level.
SUGGESTED ACTION:
Approve recommendation.
Respectfully submitted,
KEVIN RIPER
DIRECTOR OF FINANCIAL MANAGEMENT
ATTACHMENTS
APPROVED:
_______________________
THOMAS B. MODICA
CITY MANAGER
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ATTACHMENT A
List of Requested Fiscal Year 2024 Budget Adoption Actions
1. Adopt the Mayor’s proposed budget recommendations , as amended, to the Proposed FY 24 Budget. (A-1)
2. Adopt the Budget Oversight Committee’s proposed funding recommendations, as amended, to the Proposed FY 24 Budget. (A-2)
3. Adopt the expenditures and revenues as identified in the Proposed FY 24 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 24 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 24. (A-7)
8. Adopt th e Resolution approving the FY 2 4 budget for the Long Beach Harbor Department as adopted by the Board of Harbor Commissioners on June 12, 2023. (A-8)
9. Declare an emergency to exist pursuant to City Charter Section 221 for the Ordinance approving the Resolution No. UT -1482 establishing the rates and charges for Water, Sewer, and Gas services to all customers, as adopted by the Board of Utilities Commissioners on June 26, 2023 . (A-9)
10. Declare the Ordinance approving the Resolution No. UT-1482 establishing the rates and charges for Water, Sewer, and Gas services to all customers, as adopted by the Board of Utilities Commissioners on June 26, 2023, 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-10)
11. Adopt the Resolution approving the FY 24 budget of the Long Beach Utilities Department as adopted by the Board of Utilities Commissioners on June 26, 2023. (A-11)
12. Adopt a motion approving the FY 24 budget for the Long Beach Community Investment Company in the amount of $10,675,142. (A-12)
13. Adopt a motion approving the estimated transfer of $24,122,500 from the Harbor Fund Group to the Tidelands Operations Fund Group. (A-13)
14. Adopt the Resolution establishing the Gann Appropriations Limit for FY 24 pursuant to Article XIII (B) of the California Constitution. (A-14)
15. Declare an emergency to exist pursuant to City Charter Section 221 for the Appropriations Ordinance for FY 24, 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. (A- 15)
ATTACHMENT A
List of Requested Fiscal Year 2024 Budget Adoption Actions
16. Declare the Appropriations Ordinance for FY 24, 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-16) ATTACHMENT B
FY 24 PROPOSED FY 23 ESTIMATED FY 24
FUND GROUP EXPENDITURES CHANGES* CARRYOVER** APPROPRIATIONS*** GENERAL FUND 719,137,012 - - 719,137,012 UPLAND OIL FUND 10,314,080 - - 10,314,080
GENERAL GRANTS FUND 11,598,781 - 27,185,298 38,784,078 POLICE & FIRE PUBLIC SAFETY OIL PROD ACT FUND 2,871,145 - - 2,871,145 HEALTH FUND 64,077,201 23,890 41,504,528 105,605,619
CUPA FUND 2,935,653 - - 2,935,653
SPECIAL ADVERTISING & PROMOTION FUND 11,599,628 - - 11,599,628 HOUSING DEVELOPMENT FUND 12,463,329 - 18,219,282 30,682,611 BELMONT SHORE PARKING METER FUND 844,382 - - 844,382 BUSINESS ASSISTANCE FUND 757,019 - 4,246,567 5,003,586 COMMUNITY DEVELOPMENT GRANTS FUND 18,319,604 - 25,491,614 43,811,218 HOUSING AUTHORITY FUND 109,722,688 - 5,737,141 115,459,829 GASOLINE TAX STREET IMPROVEMENT FUND 11,889,365 - 14,044,644 25,934,008 CAPITAL PROJECTS FUND 184,852,036 (68,644) 663,205,342 847,988,734 SUCCESSOR AGENCY OPERATIONS 4,233,281 - 29,466,722 33,700,003 CIVIC CENTER FUND 24,819,094 - 480,371 25,299,465
GENERAL SERVICES FUND 78,420,346 - 20,707,380 99,127,726 FLEET SERVICES FUND 51,911,234 - 3,482,863 55,394,097 INSURANCE FUND 74,815,760 - - 74,815,760
EMPLOYEE BENEFITS FUND 416,869,196 - - 416,869,196 TIDELANDS OPERATIONS FUND 107,900,479 - 95,545,309 203,445,788 TIDELANDS AREA FUNDS 38,084,601 - 18,073,198 56,157,799 TIDELANDS OIL REVENUE FUND 91,961,960 - - 91,961,960
RESERVE FOR SUBSIDENCE - - - -
DEVELOPMENT SERVICES FUND 35,350,578 - (2,056,422) 33,294,157 GAS PREPAY 46,131,723 - - 46,131,723
AIRPORT FUND 60,627,755 - 57,420,340 118,048,095
REFUSE/RECYCLING FUND 72,340,343 - 2,170,576 74,510,919 SERRF FUND 7,093,001 - - 7,093,001
SERRF JPA FUND - - - -
TOWING FUND 7,327,677 - - 7,327,677
DEBT SERVICE FUND 11,593,856 - - 11,593,856
SUCCESSOR AGENCY - DEBT SERVICE 23,991,962 - - 23,991,962 TOTAL 2,314,854,768 (44,754) 1,024,924,753 3,339,734,767 **Reflects estimated carryover for accounts with projects and grants as of 5/31/23. ***The total appropriations for all fund groups is $4,264,914,347. This is derived from the total FY 24 Appropriations amount above, plus $925,179,581 for the Harbor, Water, Sewer, and Gas Fund Groups not listed above. Note: figure may not account for rounding.
FISCAL YEAR 2024 APPROPRIATIONS ORDINANCE BY FUND GROUP (Does not include Harbor, Water, Sewer, and Gas Fund Groups) *Please refer to the Fiscal Impact section of the City Council Letter for a general description of notable changes.
FY 24 Fund Attachment B 8/16/2023
ATTACHMENT C
FY 24 PROPOSED FY 23 ESTIMATED FY 24
DEPARTMENT EXPENDITURES CHANGES* CARRYOVER** APPROPRIATIONS**** MAYOR AND COUNCIL 8,050,573 - (1,081) 8,049,492 CITY ATTORNEY 10,617,544 - (3,900) 10,613,644 CITY AUDITOR 3,507,601 - - 3,507,601 CITY CLERK 5,281,467 - - 5,281,467 CITY MANAGER 27,188,045 - 7,282,576 34,470,621 CITY PROSECUTOR 7,138,407 - 1,674,586 8,812,993 CIVIL SERVICE 3,895,471 - - 3,895,471 AIRPORT 59,725,492 (52,449) 57,230,336 116,903,379
DISASTER PREPAREDNESS &
EMERGENCY COMMUNICATIONS 14,395,629 - 1,561,976 15,957,605 DEVELOPMENT SERVICES 88,275,826 - 71,224,979 159,500,804 ECONOMIC DEVELOPMENT 32,677,659 - 98,767 32,776,426 FINANCIAL MANAGEMENT*** 754,073,266 - 112,562,598 866,635,864 FIRE 166,301,404 - 3,545,615 169,847,019 HEALTH AND HUMAN SERVICES 187,127,193 23,890 47,180,253 234,331,336 HUMAN RESOURCES 38,587,031 - (686,811) 37,900,220 LIBRARY SERVICES 19,653,165 - 5,118,904 24,772,068 ENERGY RESOURCES 109,001,976 - - 109,001,976 PARKS, RECREATION AND MARINE 78,528,151 - 31,107,645 109,635,795 POLICE 314,615,694 - 11,173,594 325,789,289 POLICE OVERSIGHT 1,499,453 - - 1,499,453 PUBLIC WORKS 316,580,874 (16,195) 653,806,601 970,371,280 TECHNOLOGY & INNOVATION 72,962,731 - 22,048,117 95,010,848 TOTAL 2,319,684,651 (44,754) 1,024,924,753 3,344,564,651 **Reflects estimated carryover for accounts with projects and grants as of 5/31/23. ****The total appropriations for all fund groups is $4,264,914,347. This is derived from the total FY 24 Appropriations amount above, plus $920,349,696 for the Harbor and Utilities Departments not listed above. Note: figure may not account for rounding.
FISCAL YEAR 2024 APPROPRIATIONS ORDINANCE BY DEPARTMENT (Does not include Harbor and Utilities Departments)
*Please refer to the Fiscal Impact section of the City Council Letter for a general description of notable changes. ***Department of Financial Management includes internal service charges that are contained in the resolutions of the Harbor, Water, Sewer, and Gas Fund Groups for accounting, budgeting and treasury functions, and other citywide activities such as debt service.
FY 24 Dept Attachment C 8/16/2023
ATTACHMENT D
FUND GROUP FY 24 PROPOSED
REVENUES
CHANGES* FY 24 PROPOSED
BUDGETED
REVENUES
GENERAL FUND 676,790,001 - 676,790,001
UPLAND OIL FUND 11,811,475 - 11,811,475
GENERAL GRANTS FUND 11,147,287 - 11,147,287
POLICE & FIRE PUBLIC SAFETY OIL PROD ACT FUND 2,897,874 - 2,897,874 HEALTH FUND 63,475,465 - 63,475,465
SPECIAL ADVERTISING & PROMOTION FUND 12,008,333 - 12,008,333 HOUSING DEVELOPMENT FUND 12,735,212 - 12,735,212
BELMONT SHORE PARKING METER FUND 893,794 - 893,794
BUSINESS ASSISTANCE FUND 728,199 - 728,199
COMMUNITY DEVELOPMENT GRANTS FUND 9,778,871 - 9,778,871 GASOLINE TAX STREET IMPROVEMENT FUND 13,096,064 - 13,096,064 CAPITAL PROJECTS FUND 173,206,602 (16,195) 173,190,407 CIVIC CENTER FUND 24,361,028 - 24,361,028
GENERAL SERVICES FUND 78,547,435 - 78,547,435
FLEET SERVICES FUND 67,916,587 - 67,916,587
INSURANCE FUND 84,593,625 - 84,593,625
EMPLOYEE BENEFITS FUND 416,498,796 - 416,498,796
TIDELANDS OPERATIONS FUND 112,569,406 - 112,569,406
TIDELANDS AREA FUNDS 34,619,590 - 34,619,590
TIDELANDS OIL REVENUE FUND 98,787,714 - 98,787,714
RESERVE FOR SUBSIDENCE 5,286,979 - 5,286,979
DEVELOPMENT SERVICES FUND 36,905,203 - 36,905,203
GAS PREPAY FUND - - -
AIRPORT FUND 65,877,118 - 65,877,118
REFUSE/RECYCLING FUND 73,516,115 - 73,516,115
SERRF FUND 4,150,000 - 4,150,000
SERRF JPA FUND - - -
TOWING FUND 7,328,360 - 7,328,360
HOUSING AUTHORITY FUND 105,713,883 - 105,713,883
SUCCESSOR AGENCY OPERATIONS 4,219,567 - 4,219,567
CUPA FUND 1,864,161 - 1,864,161
DEBT SERVICE FUND 10,000,690 - 10,000,690
SUCCESSOR AGENCY DEBT SERVICE 30,162,041 - 30,162,041
TOTAL 2,251,487,476 (16,195) 2,251,471,281 FISCAL YEAR 2024 REVENUES BY FUND GROUP
(Does not include Harbor, Water, Sewer, and Gas Fund Groups) *Please refer to the Fiscal Impact section of the City Council Letter for a general description of notable changes.
FY24 Fund Attachment D‐ REVENUE 8/16/2023
Long Beach Community Investment Company (LBCIC)
Established by the City Council, the Long Beach Community Investment Company (LBCIC) oversees the delivery of housing and neighborhood revitalization services. The Housing Services Division in the Development Services Department staffs the LBCIC. Annually, the LBCIC prepares its housing budget for approval by the City Council. The LBCIC’s budget is a subset of the entire Housing Development Fund Group. Revenue sources in this fund include rental income, loan repayments and interest from mortgage assistance programs, and land sale proceeds. This revenue supports the FY 24 LBCIC budget of $10,675,142. The development of housing is a multi-year endeavor and staff continues to work on projects budgeted in prior years.
LBCIC Expenditures Budget
Operation of LBCIC-owned properties (321 W. 7th Street and 1044 Maine Avenue) 228,000 Development Projects Rental - Notice of Funding Available 10,000,000 Administration 447,142
Total 10,675,142$
The Long Beach Community Investment Company
LBCIC Expenditures
FY 24
PROPOSED
BUDGET
LBCIC-Owned Rental Projects
321 West 7th (Lois Apartments -- 24 units) 150,000
1044 Maine Apartments (11 units) 78,000
Subtotal LBCIC-Ow ned Rentals 228,000 $
Development Projects
Rental
Bloom at Magnolia -
E
xcelerate - 3590 E PCH -
No
tice of Funding Availability 10,000,000
Subtotal Rental 10,000,000$
LBCIC Administration
Administrative Expenditures 110,142
HOME Revenue Transfer
Project Administration (Property Mgmt/Project Dev) 200,000 Project Staff Costs 137,000
Subtotal LBCIC Admin 447,142$
Total LBCIC Expenditures 10,675,142$