Long Beach leaders unveiled a proposed $3.2 billion budget Tuesday that would add police officers, speed up the repair of city streets and invest in other city infrastructure, while also patching together one-time funds to fill a significant projected deficit.
Mayor Robert Garcia and city leaders detailed the budget at a press conference inside the City Council chambers, which begins a roughly monthlong process of public meetings before the City Council votes to approve the budget for the fiscal year starting in October.
The city’s general fund, the part that pays for basic city services like police and fire personnel salaries, watering parks and fixing roads, grew to $669 million this year, and its allocations could be subject to change depending on what programs individual council members want to bolster over the coming weeks.
Alongside the city’s budget is a new five-year spending plan for Measure A, the city’s 1% sales tax that has generated tens of millions per year and has been used primarily to fund police and fire staffing but also improvements to city facilities and streets.
That funding will dip over the next few years as the city starts to pay into the Los Angeles County Measure H homeless tax, which city residents have not paid for since it was passed by voters five years ago. That could complicate the city’s efforts to balance the 2024 budget that currently projects a $25.6 million deficit.
“Next year will be tougher,” City Manager Tom Modica said. “We do hope that the economic recovery will continue but you don’t ever know what the future will hold.”
Here are some key takeaways from the proposed 2023 fiscal budget:
One of the largest concerns of residents and city officials over the past few years has been the growing number of people living unhoused in the city and how to get them off the streets. The city’s annual homeless count showed that the number of unhoused people in the city grew by 62% since 2020, the last year that a count was conducted due to the COVID-19 pandemic.
This year’s budget proposes adding another Restorative Engagement to Achieve Collective Health (REACH) team to the city’s ranks, which would bring the total to three. The teams are comprised of homeless outreach workers, a clinician and a nurse that respond to calls to the city about homeless individuals and provide medical service and try to connect them to city services and housing opportunities.
City officials said earlier this year that the team has responded to hundreds of calls already since the first two teams were mobilized a year ago, but that number is likely to increase now that the city’s dispatch system will reroute calls for service from police and fire personnel to the reach team.
It was estimated that adding a third REACH team would cost about $500,000 but would expand the teams’ availability into weekends.
The proposed budget also calls for nearly $2.5 million in funding for encampment cleanups and a set aside of $250,000 for a towing fund that would forgive fees for unhoused people who have their vehicles impounded by the city.
It also proposes $9.3 million to be spent over the next five years on repairs at the city’s Multi-service Center and for the purchase of a hotel to house people.
The proposed fiscal budget calls for the creation of 20 additional positions within the Long Beach Police Department, with 16 being for officers to patrol communities on bicycles and four being proposed for new “quality of life” officers.
The 16 bike positions would be split up across the city’s four different police divisions and wouldn’t respond to typical calls for service; instead they would focus more on community engagement. The quality of life officers are armed officers who are dedicated to homeless outreach, and with the addition of four new officers, the city would double its quality of life team.
The City Council had proposed a similar addition in early July after the budget had already been completed as it sought to build better connections with residents through bike officers, who it said could be less intimidating than officers patrolling in department-issued vehicles.
Measure A funding is being proposed to support a coordinated response team in the city ($1 million) with an emphasis on gun-related crimes and to pay for the city’s share ($609,333) of a federal grant that it applied for last year to keep an East Long Beach fire station open.
Within the five-year Measure A spending plan proposed alongside the annual budget the city also identified over $23 million in improvements to fire and police stations and academy buildings over the next five years.
Measure A spending
A new five-year spending plan for Measure A showed the city pledging about $238 million in spending over the next five years to improve city streets, parks and other facilities through Measure A, the 1% sales tax increase made permanent by voters in 2020.
The city’s infrastructure plan includes an estimated $284 million in other state and local taxes and grants that ballooned the city’s total spending plan to $521 million over the next five years.
The plan calls for over $217 million being spent to fix city streets, $48 million to improve playgrounds and other park infrastructure as well as funding to trim and remove defective city trees.
To speed up street repairs, the city is proposing issuing about $150 million in bonds that will be paid back over the course of about 20 years. But city officials say that issuing the bonds will allow the city to fix city streets before they fall into further disrepair and potentially cost more money to fix down the road.
However, starting this year, the funds are expected to be reduced by about a quarter as the city’s share of the 1% sales tax increase is reduced to .75%, with the remainder being paid to Los Angeles County for the city’s share of Measure H, a decade-long tax approved by voters in 2017 to help fund efforts to combat homeless.
Long Beach residents have yet to pay that tax because the city’s local tax rate is at the limit, but the city has continued to receive funding generated by Measure H from the county.
A new climate office
Long Beach is looking to create a new Climate Action office within the city manager’s office to help direct the city’s future efforts to combat climate change. Garcia said Tuesday that the office would include about nine positions and would combine the existing Sustainability Office with four new positions dedicated to climate action.
The City Council is expected to vote next week on the city’s Climate Action Adaptation Plan that outlines the city’s broad actions going into the future, including winding down oil production in the city, something it said should be done by 2035.
The new office will include a planning position to help implement the CAAP once it’s approved by the City Council. The office wouldn’t have the authority to make the City Council adhere to recommendations but city officials said that it would help direct the city in how it can be greener in the future.
A looming budget deficit
An infusion of hundreds of millions in state and federal COVID-19 relief funding and the local economy performing better than expected the past two years has allowed the city to continue to put off a major funding deficit by using COVID-19 money to plug budget gaps.
A budget deficit this year of $20.2 million will be filled with one-time COVID-19 relief funds ($14.5 million) and other sources.
The city is projecting a roughly $25.6 million shortfall for the next fiscal year starting in October of 2024.
City officials are optimistic that the total could shrink as it has in past budget cycles, but it’s likely that the city will have to close that gap without the aid of pandemic relief funds. The projected shortfall also aligns with the negotiations for new contracts for city employee unions, including the LBPD, which makes up over 40% of the city’s general fund in a given year.
One thing that made the hole bigger was the city’s legal loss earlier this year when the Supreme Court of California declined to hear its appeal over the Measure M transfers from the water department to the general fund. That resulted in the city having to transfer $30.8 million back to the water department this year and will result in the general fund being about $8 million less going forward.
The Long Beach Water Commission voted earlier this year to return all of that money to city water customers in the form of bill credits. The city still needs to send about $21.8 million to the department by next month and officials said Tuesday that it would likely accomplish that by borrowing from the city’s fleet services fund to avoid paying interest on municipal bonds and instead would pay interest to itself. The plan still needs City Council approval and could be brought before it for a vote in the coming weeks.
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