Mayor Rober Garcia presenting his proposals for the 2016 fiscal year budget. Photo: Jason Ruiz

During a crowded press conference inside the Long Beach Water Department’s Groundwater Treatment Plant today, Mayor Robert Garcia and City Manager Pat West revealed the 2016 fiscal year budget recommendations that will be presented to the city council in the coming weeks. The mayor called the budget one that would maintain important programs within the city while setting the city down a “path of fiscal prudence” as it prepares for years of projected budget deficits.

The $2.7 billion budget forecasts for a modest $600,000 surplus that is expected to be rolled over for use in offsetting projected shortfalls of $7.5 million in 2017 and $7.8 million in 2018. Of the $412 million general fund, nearly 70 percent is dedicated to public safety programs, including replenishing the ranks of the city’s fire and police departments.

“What’s important about this budget is this budget is lean and it lives within our means,” Garcia said. “We all know that the last few years have been tough when it comes to ensuring that we have a responsible budget, and in spite of that rough patch that we hit as a city and country financially, we have begun to recover out of that.”

Additional areas of focus for the budget included a proposal to spend nearly $22 million to improve local streets, sidewalks and major roads in the city. To improve the city’s livability, the mayor also proposed the introduction of two new “clean teams” that would work to beautify the city by cleaning up graffiti, trash and weeds.

An initiative to help lessen the burden of neighborhoods with impacted parking situations by implementing the first street sweeping overhaul in nearly 30 years was also included in the budget proposals. If approved, it would reduce the number of hours blocked out for the sweeping service by half, something that West agreed would improve the quality of life for residents.

“So now, those of you [who] are in our parking-impacted neighborhoods and you’ve gotta get out there and move your car at 4:00AM, hopefully you’ll never have to do that again once we get that done,” West said.

The project is expected to cost about $950,000. This includes the cost of replacing signs in the affected areas of the city. Other neighborhood improvements proposed in the budget included a motion to convert the city’s current high pressure sodium street lights to brighter LED lights and converting medians in the city to more drought tolerant landscaping.

The mayor’s budget also includes nearly $400,000 to start the process of improving the signage at the entrances of the city.

The budget will be presented to the city council and will undergo a series of community budget hearings in each district throughout the month of August before getting its first opportunity of being adopted September 8. The last date for the city council to approve the budget will be the following meeting on September 15.

Ninth District Councilman Rex Richardson, who was in attendance at the event, said he would fight for those items in the budget that were most important for the community he represents, namely public safety and small business investments. However, he said that he didn’t envision that much push back in getting this budget approved because of the relative stability that exists in the city’s current finances.

“I think that since we have one more year of budget peace, I don’t anticipate too much of a fight with the adoption of the budget, but I want to make sure that we maintain some of the commitments made here and make some more flexible investments to our business corridors moving forward,” Richardson said.

Projected cost of CalPERS for the city. Photo: City of Long Beach

West said that despite the small surplus for the coming year, darker times loom in the future. He attributed this unsteady future to the price of oil, which has plummeted by nearly 50 percent since January of last year, and because of the unfunded liabilities for city employees’ pensions.

The upcoming deficit produced by previously uncovered costs accrued by the California Public Employees Retirement System (CalPERS) was originally projected to increase every year through 2021, where it would peak at about $35.6 million in unfunded liabilities for the city.

During the presentation, West provided some promising news regarding CalPERS, stating that due to prior “excellent investment earnings”, those numbers have dropped considerably, which could save the city millions of dollars if the current projections hold true. He also noted that major pension reforms struck with city employees has resulted in saving for the city of nearly $14 million per year from the general fund. In return, he said that although no raises for city employees were included in the budget, nothing was proposed to be taken away either. 

“Hopefully in three or four years this will be over and at least the pension issues won’t be something that we’re facing in the future,” West said.

The emphasis on maintaining the current level of spending on public safety was something that Long Beach Police Department Chief Robert Luna said was grateful for given the tough economic times. He said that providing his department with more funding for overtime will allow for the LBPD to suppress and prevent violent crime more often and efficiently, as it will employ a more data-driven approach to affect impacted neighborhoods.

“If you look at the economic forecast and what’s going on around us, we’re very fortunate to be able to hang on to what we have,” Luna said. “There have been so many years that we’ve had to reduce and right now we’re looking at a year where, if the city council approves it, we wont have to take any more reductions. It’s a big relief for us.”

Breakdown of spending of 2016 fiscal year general funds. Photo: City of Long Beach

Luna said that although the mayor’s proposal to not only continue with police academies in the future, but to increase the class sizes to help the department deal with attrition, will be helpful to the department.

However, he said the topic of hiring was looked at through a long run lens, in regard to how affordable those additions would be once the city hits budget deficit years in the near future.

“People ask me all the time ‘wouldn’t you want more police officers?’” Luna said. “That’s like asking you if you want more money in your wallet. Of course we can always do so much with more, but look at this budget, what we have to do is forecast for the next two or three years. If we hire more officers now, how does that impact us or the city. We’re looking at the big picture.”

The big picture will be the focus going forward for city management, as the 2016 fiscal year will most likely be the last that includes a budget surplus for some time. The mayor and council members will have to make more tough decisions, like the ones already made over the past decade in reducing staff positions by nearly 700 and reigning in general fund spending by $134 million.

In closing, Garcia thanked all the departments for what he called a truly collaborative effort to create a solid budget.

“I want to thank City Manager West and the whole management team for putting together a budget that invests in the future of Long Beach, but really keeps the belt pretty tight, because we all know we have to be responsible and we’re all committed to putting the days of overspending behind us,” Garcia said. “We’re really proud of the product we have.”