The City Council on Tuesday unanimously approved a loan of up to $5 million for the Aquarium of the Pacific, which has been suffering significant financial hardship brought on by the COVID-19 pandemic.
The aquarium closed out 2020 with a net loss of $13 million, having lost $600,000 to $1.1 million per month due to coronavirus closures and restrictions. Regardless of attendance, the facility has about $2 million worth of necessary monthly expenditures that cannot be overlooked for the health and safety of its animal inhabitants.
Though she supported the motion to approve the loan, Councilwoman Suzie Price voiced some concern about the funding and backing source for the loan: the Oil Field Abandonment Reserve and the Tidelands Operating Fund, respectively.
The Tidelands Fund pays for various programs, services and projects, including the convention center maintenance and improvements, lifeguards, tree trimming, and developments. Two notable developments to be funded with Tidelands money are the Belmont aquatic center and the Belmont Pier upgrades, both of which reside in Price’s district.
“For many years it was through that the [fund] was positive and secure and stable and a reliable source to fund a lot of what we have along the ocean, including major city assets like the convention center, Queen Mary and the aquarium,” Price said. “That is no longer the case as we look at the obligations in the Tidelands area and what we have to fund.”
While aquarium and city staff think it unlikely to occur, should the aquarium be unable to pay its loan down the line, the Tidelands Fund, which comes mostly from oil revenue, would be used instead.
The Oil Field Abandonment Reserve is a pot in the Tidelands Oil Reserve Fund set aside for when oil production ceases at city-owned wells, which must then be capped. With around 2,000 city-owned wells in Long Beach, the city is on the hook for more than $140 million of abandonment liability over the next decade or two, while the state is in for more than $900 million for those same wells.
The city deposits about $6 million per year in the fund, but suspended the practice last year and may not contribute to it this year or the next, according to the city memo. Before considering the loan, the fund has $34 million.