Here’s a look at Long Beach’s proposed $3.2 billion budget

By KRISTY HUTCHINGS | khutchings@scng.com |
PUBLISHED: August 1, 2023 at 4:26 p.m. | UPDATED: August 2, 2023 at 11:01 a.m.

Long Beach will avoid an $8.8 million general fund shortfall for the 2024 fiscal year with its proposed $3.2 billion budget — while also carving out additional funding for citywide infrastructure improvements ahead of the 2028 Summer Olympics, investments in the city’s own workforce, and homelessness.

Local leaders gathered at Admiral Kidd Park on Tuesday, Aug. 1, to unveil the city’s proposed budget, which must be approved by the City Council by Sept. 12, ahead of Long Beach’s new fiscal year beginning in October.

City officials originally estimated a $27 million budgetary deficit for the upcoming fiscal year — but were able to shrink that down to about $5.8 million thanks to significant savings from employee vacancies across city departments and strong revenue growth, City Manager Tom Modica said during the Tuesday presentation.

But because the City Council in April approved implementing a 1% tax reduction and creating a tax credit program for local cannabis dispensaries that meet certain qualifications — which is expected to have a $3 million impact on the General Fund — that projected deficit grew to about $8.8 million.

“We are going to be releasing some reserves to be able to cover (the deficit) this year,” Modica said.

The remaining $5.8 million shortfall will be covered with one-time COVID-19 relief funding from the Long Beach Recovery Act. The proposed budget also boasts about $26.9 million in extra one-time funding, including nearly $20 million in surplus funding from the 2023 fiscal year budget and another $7.5 million Long Beach won from a legal settlement against agribusiness giant Monsanto Co.

But even with the upcoming fiscal year’s structural shortfall squared away, Long Beach is still grappling with projected long-term deficits through the 2027 fiscal year — with a $38.6 million general fund shortfall combined anticipated during that time.

“We’re still in a structural shortfall,” Modica said. “We are relying on one-time dollars this year and next year — we believe — but we need to solve that structurally going forward.

“Our strategic approach,” he added, “is to address key areas of priority, resolve our vacancy and hiring crisis, and launch a multi-year plan to invest in our economic growth and reduce our out-year structural shortfalls.”

If the city isn’t able to bolster its revenue enough to offset the structural shortfall by the 2025 fiscal year, Modica said, Long Beach may have to consider budget cuts.

“(We’re) living within our means, but also knowing that we do have to make some major changes in two years,” the city manager said. “Hopefully it’s going to be through revenue and through additional resources, and if not, then we have to consider reductions.”

To that end, Long Beach’s proposed 2024 fiscal year budget includes several new funding allocations for programs and initiatives intended to strengthen the city’s existing revenue sources — while expanding support for lucrative industries expanding in Long Beach, such as tourism and aerospace.

The proposal includes a one-time $550,000 pot of seed money to help the Economic Development Department formally establish and implement the Grow Long Beach initiative — Mayor Rex Richardson’s City Council-approved plan intended propel the economic growth of the city’s main industries while exploring alternative revenue streams to wean the city away from its reliance on oil revenue.

That money could be used to design and implement Grow Long Beach, including $300,000 to hire a consultant who will study revenue generation opportunities in Long Beach, and another $250,000 to support targeted industry business development, city officials said.

The proposed budget also includes $300,000 to fund a marketing campaign to attract, expand and retain business in Long Beach, half a million dollars to pay for a Visit Long Beach advertising campaign, and $200,000 to create a  Downtown Long Beach advertising district.

Richardson, meanwhile, submitted his own set of recommendations for the proposed budget.

On the economic development front, those recommendations included creating a five-year plan to develop Pier H and the areas surrounding the Queen Mary ahead of the 2028 Summer Olympics.

Richardson also proposed a similar plan, this one over 10 years, to scope out the feasibility of redeveloping — or even repositioning — the Long Beach Convention & Entertainment Center and the nearby elephant lot, which could potentially house a sports team.

“By exploring how we can reposition the Convention Center and Elephant Lot to grow the city’s capacity for conventions, sporting events,” Richardson said Tuesday, “(we can expand) the city’s capacity for major activities that will catalyze tourism over the next decade.”

Another significant and long-term plan Richardson proposed as part of the 2024 fiscal year budget is called the “West Side Promise,” which asks the city manager’s office to develop a 10-year community investment plan for West Long Beach, an area that has historically lacked significant city investments and suffered undue health impacts as a result of pollution from the nearby port.

“The goal of the West Side Promise is to call on our city manager, our city departments, philanthropic leaders, environmental advocates, educators, community based service providers, and the private sector,” Richardson said, “to make meaningful commitments to West Long Beach that will improve overall health and well being of families that call the Westside home.”

Some of Richardson’s asks for that initiative include $280,000 from the general fund to pay for a West Side Promise strategic coordinator, who would be tasked with implementing programs in the area, and identifying grants and other partnerships to help bolster investment in West Long Beach.

Richardson also recommended $150,000 to establish a business improvement district along Santa Fe Avenue — and to study the feasibility of developing a new cultural center in West Long Beach.

Besides a focus on economic development, Long Beach’s 2024 fiscal year budgetary proposal would allocate funding to various programs, departments and initiatives intended to address key concerns for residents and city officials alike, including homelessness, public safety, city employee retention and citywide infrastructure.

Housing and homelessness

Long Beach continues grappling with its share of the statewide housing and homelessness crisis.

Earlier this year, the City Council declared a local emergency on homelessness, which allowed staffers to expedite bureaucratic processes associated with implementing additional homeless services and housing opportunities, and access additional state and federal funding to support those efforts.

Since then, Long Beach has implemented numerous new programs to serve people experiencing homelessness and allocated additional funding to those resources, including buying the former Long Beach Rescue Mission thrift store,702 W. Anaheim, to house a permanent shelter location there.

The proposed budget would allocate $60 million to support interim and permanent housing opportunities throughout the city, and $12 million to fund services for those who are homeless.

Another $300,000 would be dog-eared to clean up large homeless encampments in Long Beach, city officials said, with an additional $200,000 to support a new “Housing Trust Fund” pilot program. Under that initiative, the city would purchase and provide prefabricated accessory dwelling units to existing homeowners, who would then be required to rent the ADUs to low-income tenants with housing vouchers.

The city also plans to add five new positions within the health department’s Homeless Services Bureau, who would be responsible for overseeing the administrative functions of homeless services programs.

“We’ve been so successful in getting and growing the amount of grant dollars we get for homelessness, but what those don’t normally pay for are the bodies to do the implementation,” Modica said. “So we need some dollars for the program management to make sure that our homeless dollars are hitting their benchmarks on target.”

But even with that additional support, Richardson said, Long Beach still struggles to set aside dedicated funding for housing production.

“We need $30, $40, $50 million to really get to where we need to on affordable housing — that’s not in this budget. We don’t have dedicated revenue for that,” Richardson said. “But we have strategic revenue and make sure that we can expedite permits and implement all of our policies, like inclusionary housing, to make sure that we’re maximizing the opportunities we do have.”

Public safety

The proposed budget would allocate $1.3 million for a new Long Beach Police Department safety response unit, which Modica said “are overtime dollars that they use to address crime trends, measurable and increase community engagement and put these kind of on the areas that are the most needed in the community.”

The budget would also set aside $300,000 to pay for LBPD traffic enforcement and the city’s Vision Zero pilot projects, which are part of an initiative intended to reduce traffic injuries and deaths. About $244,000 would go toward adding two new public safety dispatchers and a communications center supervisor to the department’s ranks, which would level out dispatcher levels to pre-pandemic rates.

The budget would also set aside about $960,000 to support an LBPD recruitment program.

Another half a million would be allocated to the Long Beach Fire Department to allow them to bring on additional staffers as needed when service is in high demand; and $900,000 in structural funding would be reserved to fully fund Fire Engine 17 operations, Modica said.

Employee retention

One of Long Beach’s biggest challenges is hiring and retaining staffers at all levels.

Several library branch locations, for example, have been forced to temporarily close to the public over the past year because of ongoing staffing shortages within the Library Services Department.

The current average vacancy rate across city departments is about 22% — while that rate can jump as high as 40% in some departments, Modica said.

“It’s been very clear that our number one challenge in the city from an organizational perspective is recruitment and retention,” Modica said. “Our employees do all the work out there, but we are running very significant vacancy rates.” Modica said.

The proposed budget would allocate $1.7 million for recruitment and retention incentives.

The proposed budget would also allocate $383,762 to add three new positions within the Human Resources Department to expedite and strengthen the city’s hiring processes.

Elevate 28

Long Beach is also planning for some major citywide public infrastructure upgrades — from park improvements to cultural investments — through its new “Elevate 28” initiative, which is an upgraded version of the Measure A-funded capital improvement program introduced during last year’s budgeting process.

The plan includes 162 total projects and other citywide investments. The majority of those are carried over from last year, with 64  new plans added in during the 2024 fiscal year budget process, according to Public Works Department Director Eric Lopez.

“We’ve got some work to do in the next five years as we open up our doors and showcase Long Beach to the world,” Richardson said, “as the city prepares to host major events, (like the) 2026 FIFA World Cup and the 2028 Olympics.”

Elevate 28 intends to focus on improving youth sports facilities, parks, art and cultural centers, and other Long Beach landmarks over the next five years, with about $214 million dollars of funding from Measure A revenue, bonds and various grants.

Projects are planned throughout the city are separated into three main categories:

• 2028 Olympic Legacy, which includes improvements to the Long Beach Airport, the Queen Mary, Marine Stadium and the Convention Center, and completing the new Belmont pool.
• Community and cultural investments, which include plans to conduct an African American Cultural District feasibility study, construct a grand entrance for Cambodia Town, create an early design for a Latino Cultural Center and an LGBTQ+ Cultural Center, along with constructing the LGBTQ cultural district along Broadway.
• Gold Medal Park Refreshment Projects, which include improvements to various playgrounds, sports facilities and park amenities at Admiral Kidd, Houghton, Hudson, MacArthur, Silverado, Bixby and El Dorado parks, among others.

Other project categories, which were already included in the original capital improvement plan, include efforts to improve mobility, other parks, public facilities, public right-of-way areas, and water quality citywide.

The proposed budget also includes allocations for youth programs and opportunities, climate action and the environment.

Residents can still give feedback on the proposed budget. Several community meetings are planned throughout August. A list of upcoming meetings and the full 2024 fiscal year budget proposal is available on the city’s website.