Today, the City of Long Beach unveiled its Proposed Fiscal Year 2021 (FY 21) Budget.
The Proposed FY 21 Budget is $2.6 billion and continues the tradition of providing a diverse array of services addressing the City Council’s priorities while emphasizing good financial management and policies. To resolve a projected FY 21 $30 million General Fund shortfall, the proposed budget is balanced and relies on a multi-faceted strategy of assistance from City employees, new or reallocated revenues, strategic investments, efficiency improvements, and service reductions.
Long Beach is a full-service City and prides itself on providing a variety of resources and services to the community. This budget preserves and protects many critical services, including the provision and improvement of affordable housing; support for economic development and business assistance; the overall continuum of public safety and emergency medical response; a comprehensive homelessness response; maintenance of safe, clean and accessible parks and facilities; and support for infrastructure and livability improvements.
“This proposed budget is balanced, and is a reflection of leading through the largest global public health crisis of our lifetime,” said Mayor Robert Garcia. “Addressing COVID-19 requires hard and bold budget decisions to preserve the future of our city.”
Since the Great Recession, the City has largely been able to focus on growth, making strides in innovations and improvements for residents under the leadership of the Mayor and the City Council as well as the innovation, hard work and creativity of City staff. This year, the City faces an unprecedented series of issues – a world-wide pandemic, the injustices of systemic racism, a faltering and uncertain economy and the projected largest budget shortfall in recent history.
“Like so many of our residents and business, the City is facing significant financial challenges with the impacts of the global COVID-19 pandemic, large losses of revenue, rising costs, and growing needs for investment,” said City Manager Tom Modica. “This budget is just the beginning of a difficult but promising path to the future. It demonstrates the City’s resiliency, drive and a strong determination by City leaders and staff to make very tough decisions to balance the budget while delivering the best services in the midst of serious challenges.”
The Proposed FY 21 Budget includes funding for the continued COVID-19 response, invests in racial reconciliation work and uses a multi-step balanced-outcome-based approach to solve the $30 million budget shortfall while maintaining core services in a balanced way. These solutions for the structural shortfall include:
- $18.8 million in Department reductions across all departments, totaling a reduction of 136 positions (77 filled and 59 vacant).
- $2.5 million in investment in Racial Equity initiatives.
- Up to $11 million in employee furloughs or other solutions through negotiations of long-term contracts, preventing additional service reductions and sparing up to 106 additional layoffs.
- $2.9 million in use of operating reserves.
In FY 20, the City has responded swiftly and effectively to the global health crisis and pandemic, dedicating over 100 personnel to the City’s Emergency Operations Center since March; investigating over 8,000 cases; providing free medical care for over 4,100 individuals; providing shelters for 300 people experiencing homelessness; testing over 123,000 people at City drive throughs and private medical providers; supporting non-profits through privately raised funds of $1 million; creating the first-ever eviction moratoriums; providing business support through delay of fines and fees; managing PPE with 1.7 million items in inventory; conducting 4,700 COVID-19 business inspections; and managing thousands of calls at dedicated call centers.
The Proposed FY 21 Budget reflects the City’s continued commitment to respond to the pandemic and address community health and business needs. The City is expecting to spend over $100 million, funded by grants and federal, state and county assistance, for various needs including:
- Robust COVID-19 testing, contact tracing and education
- Community support programs addressing food insecurity, health education, early childhood support and sheltering for those experiencing homelessness
- Business support programs, including small business and non-profit personal protective equipment (PPE) distribution as well as a variety of grants for small businesses
Racial Equity and Reconciliation Initiative
Racial reconciliation investment will include an investment of $3.2 million ($2.5 million in operating, and $702,000 in one-time), including:
- Investments in youth, violence prevention and mental health; library model changes; summer youth programming; equity training; increased language access; enhancements to the Office of Equity and other investments.
Budget Shortfall Response
The Proposed FY 21 Budget utilizes a multi-faceted balanced-outcome-based approach to solve for the shortfall. Through this process, many core services were prioritized and preserved in the budget, including:
- Emergency response including Priority 1 and 2 police calls for service, emergency medical and fire services
- Infrastructure investments, avoiding cuts in sidewalk repairs, pothole response and major facilities’ maintenance
- Funding to maintain public spaces and assets such as landscaped medians, graffiti abatement and the majority of tree trimming services
- Core youth and senior programming
- Provision and improvement of affordable housing
- Clean Teams
- Business assistance programs
- Comprehensive homelessness response
- Animal Care services
- Investments in technology, green fleet, and energy efficiency investments
- Economic development and business assistance
Assistance from Employees
Part of the budget balancing strategy includes assistance from employees. The Budget proposes $11 million of savings in the General Fund through employee furloughs or other contributions that will be determined through negotiations with employee bargaining groups. Depending on the results of negotiations, this could result in the potential for up to 26 furlough days, closing City services, and equivalent to 10 percent of pay. The savings generated, however, would provide significant short-term relief and help avoid additional layoffs and minimize service impact to the community.
New or Reallocated Revenues
The proposed budget includes proposed revenue increases and reallocations to help resolve the shortfall, including an increase in the business license tax on cannabis businesses by one percent for medical and adult-use retail sales. additional $4.5 million of Measure A funds for maintenance of public safety services; additional fees to cover services, and additional Gas Fund transfer to support City services.
The proposed budget makes capital, structural, and one-time strategic investments that have long-term benefits and helps avoid even greater costs in the future.
These include a robust $491 million Capital Improvement Plan, with $55 million for mobility $55.2 million in mobility improvements, with significant investment funded from Measure A. This allocates investments in alley alleys ($1.2 million), arterial streets ($12.7 million), arterial corridor enhancements ($13.8 million), residential streets ($10.9 million) and ADA sidewalk curb improvements ($9.5 million).
Additional investments include ongoing budget for Sunnyside Cemetery; staffing for the newly-formed Ethics Commission; Health Department administrative support; a full-time veterinarian position in Animal Care and funding to implement Compassion Saves; and additional funding for Park water and median landscaping needs.
Also included as strategic investments are: Funding for runoff elections; redistricting efforts and Census efforts; Funding for a comprehensive study of the Fire Department to analyze operations and identify a strategic plan for future cost savings and revenue generation; a review of City projects to reduce greenhouse gas emissions and capture operational savings; and funding for citywide Homeless rapid response efforts.
Efficiencies and Innovations
The proposed budget includes savings from the evaluation of efficiencies, innovations, and new ways of doing business throughout the organization. These efforts include:
- The civilianization of police in some areas of response, replacing 34 sworn positions with 28.7 civilian positions, saving $3.8 million. One example is the replacing 16 police officers with uniformed, unarmed civilians to respond to Priority 3 (non-violent 911) calls. Those police officers will fill other roles within LBPD.
- The redesign and restructuring of the Homeless Education and Response Team (HEART) model with a greater public health focus, using nurse or other positions from the Health Department instead of firefighters.
- Restructuring Jail operations, reducing 12 non-sworn positions.
- Reevaluating where services previously performed by consultants can be brought in-house to be performed by City staff, and those that can be provided by contracts.
- Reduction of positions no longer needed due to the City’s past investments that have helped streamline operations, such as lower labor needs due to investments in modernizing the City’s Fleet.
While the budget seeks to maintain and prioritize a wide range of diverse services, the size of the shortfall still requires difficult budget cuts. The City will continue to work towards any efficiencies and innovations that can help mitigate reductions. Some examples include:
- A restructuring of Library services to enhance services in underserved areas while also addressing the budget shortfall.
- Reduction of management positions, consultant staffing and administrative reductions in departments, which will result in some service reductions and less staffing capacity.
- Reduction of 59 sworn officers citywide (54 from the Police Department and five from the Fire Department), including the 34 civilianized Police positions, and reductions in the areas of vice detail, narcotics, K-9, air support, LBUSD policing and Metro Blue Line policing. Priority 1 and 2 patrol response remain unaffected.
- Reduction to the cannabis oversight and enforcement program.
The City Manager provided the Mayor with his Proposed Budget in July. The Mayor has reviewed and supports the Proposed FY 21 Budget, and has made additional recommendations, including:
- Establishment of new Public Health Councils.
- Review of emergency calls for service and consider new models of response.
- Restoration of existing library hours at all libraries throughout the city.
- Restoration of services proposed to be contracted out.
- Rolling back of a proposed increase to Youth Sports Registration Fees.
- Creation of new 5-year infrastructure plan.
The City Council will hold the first of several budget hearings on Tuesday, August 4, at 5 p.m. to begin the budget review process. The Budget Oversight Committee will meet in August to review the budget and provide recommendations to the full City Council. This Proposed Budget will go through review and ultimate approval by the City Council with any modifications as they deliberate and take additional input on the City’s spending plan for the next fiscal year.
City residents are invited to attend online community budget meetings throughout August. The meetings, which will be accessible by computer or by phone will take place on Thursday, Aug. 13 (English and Spanish); Thursday, Aug. 20 (English and Tagalog); Monday, Aug. 24 (English and Khmer); and Wednesday, Aug. 26 (English and Spanish). All community meetings take place from 7 to 8:30 p.m. Community members may also provide input by completing the Budget Priority Survey, available in English, Spanish, Khmer and Tagalog.
This year, the City also will debut its Stanford-designed Budget Simulation, an educational tool to give residents a chance to try their hand at making the difficult decisions in balancing the City of Long Beach’s budget. A menu of options will allow residents to simulate how different additions and cuts to the budget, to solve for the $30 million shortfall, would impact services to the City.
For more information about the Proposed Budget, including information about budget hearings and workshops, visit www.longbeach.gov/budget.