One of the bright spots in this year’s proposed budget is better-than-expected revenue from the city’s oil operations, a highly volatile pot of money that pays for high-profile projects along the coast.

The so-called Tidelands Operations Fund has funded improvements to the Long Beach Convention Center, the Beach Bike Path, financing of the Pike Outlets and millions to beautify and clean Colorado Lagoon.

The funds can only be spent along the coast and local waterways. The idea is that the projects and improvements benefit anyone who wants to enjoy the coast, not just residents of Long Beach.

But the amount in the fund is entirely predicated on the price of oil, which is shaped by global supply and demand and other factors outside the city’s control.

The current year is a good example of this volatility—though this time, the finances worked in the city’s favor.

In 2018, the city budgeted conservatively, projecting the price of oil would average about $45 a barrel, and that it would take in about $68.1 million. However, a barrel of oil is currently selling at roughly $73, and the city now expects to take in roughly $86.4 million. (The cost of oil has fallen as low as $29 a barrel in January 2016, and as high as a $108 a barrel in June 2014.)

The other largest source of revenue in the Tidelands Fund is an annual transfer from the Harbor Department, which oversees the Port of Long Beach. The transfer, which represents up to 5 percent of annual gross operating revenue at the port, was close to $20 million this year.

In the city’s latest quarterly financial audit in March, the Tidelands Operations Fund had a total of $147 million in assets and cash.

The city plans to spend about $4 million of that next year, according to budget documents released Tuesday. Some of the planned work includes improvements to beach bathrooms, lifeguard stations, parking lots and maintenance of the seawall surrounding Naples Island.

Projects budgeted for completion this year include the Seaside Way Rainbow Bridge at the Convention Center, the Leeway Sailing Center pier, dock and building improvements and a rebuilt swimming dock and aquatics play structure in the Bay Shore Avenue area.

The city, however, has a long list of high-cost Tidelands projects that have yet to be paid for.

  • The Belmont Beach and Aquatics Center cleared a legal hurdle last week, but still is not close to being fully funded. The city has set aside $56.1 million in Tidelands funds for the project, which officials estimate will cost over $100 million. No additional Tidelands funding is budgeted through at least 2021.
  • Improvements to the Long Beach Convention Center, estimated to cost $53 million.
  • Upgrades to the Belmont Pier, expected to cost $25 million. Mayor Robert Garcia has identified this as a project of high priority before the Olympics in 2028, to give visitors prime viewing of the sailing competitions slated to take place in Long Beach.

Melissa Evans is the Chief Executive Officer of the Long Beach Post and Long Beach Business Journal. Reach her at [email protected], @melissaevansLBP or 562-512-6354.