Long Beach last year received more than $60 million in federal COVID relief aid to address fiscal issues and urgent needs in the community, but a year later, the majority of those funds have yet to be spent as the city said it was waiting for clear federal guidelines.
Now, with federal guidance in place, Long Beach in recent months has rolled out a flurry of direct assistance programs under the Long Beach Recovery Act.
But with many of those programs still in the application period, it could be weeks or months before some residents and small businesses get help. And with no direct federal oversight of how it rolls out the programs, Long Beach officials will have to hold themselves accountable for timelines and funding.
City officials said the holdup was due in part to the city carefully planning more than 80 programs under the Long Beach Recovery Act to reach businesses and communities that need it the most.
“Our city council asked us to be really intentional about the design of these programs so that we are meeting the equity and collective impact,” said Meredith Reynolds, a deputy city manager who is leading Long Beach’s recovery efforts. “We’re specifically looking at how do we design programs that reduce or limit barriers to entry, particularly for our communities of color and the areas in our city hardest hit by COVID.”
Under the American Rescue Plan Act approved by Congress last year, Long Beach was allocated $135.7 million, of which it received half in May 2021, while the other half was expected this month.
Cities were required to apply for funds under general categories, including public health, infrastructure and government services.
Long Beach applied for the aid under a funding strategy in which it told the U.S. Department of Treasury that it planned to use all of the $135.7 million for government services, specifically “police department personnel costs,” including salaries, overtime and benefits.
But city officials said the police funding plan was simply listed for “administrative conveniences” on its federal application and the funding was actually distributed directly to the city’s general fund to avoid layoffs and cuts to services as a result of the pandemic.
Reynolds said this strategy allows the city to free up, or “backfill,” the general fund to pay for recovery act programs. The plan allows for more flexibility and less federal oversight from the U.S. Department of Treasury.
She said Long Beach would have had to hire extra staff just to handle the federal administrative requirements if the city had listed all of its dozens of recovery act programs on its application.
“This gives Long Beach more freedom to choose how it’s going to fund programs and the timeline to operate these programs than if it was operating under the federal guidelines,” she said. “It means that more money goes to the actual programs rather than compliance with federal regulations. And it is allowed under the rules of the U.S. Department of Treasury.”
But it also leaves Long Beach on the hook for its own accountability.
“It’s a matter of being accountable to the community, even though it’s through the general fund,” Reynolds said. “We have a very specific directive from our City Council for these programs. And if there is a dire desire to change those programs, those decisions would happen at the policy level at our City Council level. So that’s really where the accountability lies.”
Other cities, like Oakland and San Diego, have structured their federal funding in a similar way to allow more freedom as to how they spend funds.
The city of Lakewood received $11.3 million in ARPA funds, which it used to offset revenue loss under the general government services category, said city spokesman Bill Grady. The city is using the funds for areas including homeless services, eco-friendly landscaping and water infrastructure upgrades.
The Long Beach City Council in March 2021 approved the Long Beach Recovery Act to handle more than $250 million in federal and state recovery funds to support more than 80 programs in three main categories: health and safe community, economic recovery and “securing our city’s future.”
It included funding from both the Trump and Biden administrations and required some portions to be spent on specific things like rent relief, vaccinations and airport relief, while $135 million was freed up to spend on aid programs created by the city.
Long Beach has already spent tens of millions of dollars in rental assistance, vaccine rollout programs, food distribution and other pandemic aid for business and residents, but much of its direct relief funding was on hold as the city waited for specific federal guidelines for ARPA funds under the government services category, Reynolds said.
The final guidelines weren’t released until January of this year.
As of April, the city had spent just $9 million of its $64.4 million budget in Economic Recovery, which includes direct business support.
With clear federal guidelines, the city in recent weeks has launched a slew of recovery programs.
More than a year after approval, the city in March launched its direct financial assistance grants program for small businesses, including bars, restaurants and breweries. The application period ends Sunday at 8 p.m.
Small business owners who spoke to the Post said they could use the money, but some were unaware of the city’s program.
Ron Hodges, owner of Shannon’s on Pine and other local restaurants, said he hadn’t heard of the city’s direct relief program for bars and restaurants but would look into applying.
“It’s been difficult but we’re managing,” he said.
Max Viltz, owner of Village Treasures, an African gift shop in Downtown Long Beach, said she also was unaware of the grant programs.
“The pandemic was very hard, but this could be a help,” she said.
For others, the pandemic has proven to be too much. Last month, Liberation Brewing closed its doors four years after opening due to struggles in the pandemic.
This month, Pier 76 Fish Grill, a popular Pine Avenue restaurant, closed its doors after nine years in Downtown. Owner Chris Krajacic said the city’s grant program wouldn’t have helped him to stay open in the long term.
“There’s only so much a business can do,” he said.
The city is hoping other businesses will be able to stay afloat. Other recently-launched grants programs include a micro-shuttle service to support tourism, businesses and local revenue generation; a creative economy grants program to fund local artists and arts, culture and history nonprofits; and a nonprofit relief grant program.
The city is also looking to partner with community organizations to implement health programs that promote equity in underserved communities.
Other programs coming this year include a first-time homebuyer program, a motel vouchers program for homeless services, and a free mobile hotspot program for small business and low-income residents.
Long Beach last year had been projecting a budget deficit as high as $36 million from pandemic costs, but that number is now closer to $12 million, which could be covered by federal pandemic relief funds.
Click here more information on Long Beach’s various aid programs.
Staff writer Jason Ruiz contributed to this report.
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