Long Beach expects to receive $151 million in stimulus funds from the federal government, with the largest chunk expected to be used to solve the city’s budget deficits and end employee furloughs, the mayor said Monday in a video address.
However the $1.9 trillion federal stimulus bill, called the American Rescue Plan Act, has yet to be approved by Congress. Changes approved by the Senate are now waiting approval in the U.S. House of Representatives.
If it does pass, the city would receive a direct allocation from the federal government, possibly along with other county and state funds. The mayor on Monday outlined for $207 million in spending, including allocations from the county and funds already set aside by the city to help renters.
The plan outlined by Mayor Robert Garcia includes spending $83.2 million on plugging budget holes caused by the COVID-19 pandemic. About half of that money, $48 million, would go toward backfilling city reserve funds that were depleted to balance the budget, and another $30 million to be used to plug an anticipated deficit in next year’s budget.
“I can’t think of a more important thing to do with this stimulus than to prepare for the next emergency,” Garcia said in an interview. “Had we not had reserves in place, I have no idea how we would’ve dealt with the last year.”
Another $5.2 million will end city employee furloughs that were adopted to help close this year’s shortfall.
Garcia’s presentation combined previously approved programs like a $29 million rental relief initiative approved by the City Council last month that used funding approved by Congress in December to provide direct assistance to states. It also included about $27 million in grants that will come from Los Angeles County by way of the Centers for Disease Control to help with contact tracing and testing.
Garcia’s plan also proposed substantial new funding for the business sector and underserved communities as the city heads into an economic recovery period after a number of businesses were forced to close or limit operations to stem the spread of COVID-19.
The proposed plan has $51 million set aside for economic recovery, which includes everything from fee waivers for businesses ($3.5 million) to improvements for business improvement districts ($2 million).
It also provides a funding source for two previous grant programs approved by he City Council last year: $5 million in direct funding to bars, breweries, restaurants, as well as salons, barbershops and other personal care businesses.
Operators in those sectors could qualify for up to $25,000 in direct grants to help pay rent, utilities or buy start-up inventories to reopen.
“We know that businesses and workers have been devastated throughout this pandemic,” Garcia said.
Garcia’s plan also proposed $8 million to go toward economic inclusion, which includes initiatives to create economic empowerment zones and small business development but also to address the city’s digital divide. Another $4 million was proposed to help end the rising rates of violence in the city, which Garcia attributed in part to school closures and unemployment.
A city memo said that unemployment is currently 12.1% in the city and that 30% of all unemployed Gateway City residents live in Long Beach. The plan calls for $7.4 million in food security and basic needs investments and $12 million to assist those experiencing homelessness access shelter, showers, restrooms and additional housing options.
The Long Beach Recovery Act must still be approved by the City Council, which is expected to vote on the plan at its March 16 meeting.
Garcia’s funding allocations came from roundtable meetings with businesses and nonprofits, Garcia said, adding that the public’s voice could be included during upcoming committee meetings and through council member outreach to their constituents.
“I think it’s fair to say that the City Council is going to have adjustments to make and we welcome that,” Garcia said.
The city received $40 million in federal CARES Act funding last year but that money came with a considerable amount of restrictions. Unlike this round of federal funds, the CARES Act funding needed to be used in a short period of time and had to be used for COVID-related issues. The new round of funding is being allowed to be used for “general support” of a larger swath of areas of need.
Garcia said that this cycle of relief funding brings an “incredible” amount of aid to Long Beach that will help it address its finances and help the community recover faster from the pandemic. He added that the city is already hard at work advocating for more federal funds to be directed to the city when congress takes up an infrastructure bill that’s could be adopted as soon as this Summer.