Next week, Long Beach officials are expected to unveil the city’s proposed annual budget, which will lay out how much money the city will spend on everything from park playground replacements to the hiring of new firefighter recruits for the next fiscal year, which starts Oct. 1.

The document is hundreds of pages long and lays out how billions of city funds will be spent, however, much of that money is already accounted for. Only the city’s general fund, which is a fraction of the overall budget and funds city services, is negotiated and amended by the City Council.

Last year, out of the city’s full $3.2 billion adopted budget, only about $553 million was in the general fund.

While the city’s budget outlook has improved since it was first estimated that officials could be dealing with an over $40 million deficit this year, meaning large cuts to services and staffing could have been on the table, there is still work to be done.

Long Beach is still expecting a roughly $6 million deficit, but a nearly $20 million surplus from the current year and the potential for property and sales taxes to continue to outperform expectations could prevent larger cuts from being applied in this coming year’s budget.

Here are some things to look for.

What is Measure A money being spent on? 

Measure A has been a boon for the city’s budget since the 1% sales tax increase was approved by voters, as it’s injected tens of millions of dollars into the city’s general fund. But the amount of money from the tax that stays in Long Beach is set to drop for the next few years, now that the city is finally paying into a county’s homelessness tax, which will divert 25% of Measure A funds from the city to the county.

While the tax was sold to voters as a way to invest in both public safety and public infrastructure, a far higher amount of the money has gone to the city’s Police and Fire departments than has gone to city infrastructure like roads, parks and other buildings.

In 2022, out of the $75 million projected to be generated by Measure A, just $1.5 million went toward street repairs, with $63 million going to police and fire.

The tax is on course to generate to $74 million this fiscal year, according to a recent update from the city.

Last year, the city had budgeted over $41 million to maintain staffing levels within the Long Beach Police Department and to pay for large projects like the improvements to the city’s police academy buildings ($13.7 million).

The Long Beach Fire Department, meanwhile, was budgeted for about $19.2 million of Measure A funds, with a large chunk going toward staffing ($9.4 million) and about $5.7 million going toward improvements to fire stations and the fire training center.

In May, the city issued $60 million in bonds backed by Measure A funding to speed up road repairs. How much more the city dedicates to roads, alleys and other non-public safety city infrastructure will be revealed in next week’s budget release.

How will the city manage Tidelands?

Long Beach is an oil town—at least for the next handful of years.

The city has said it expects to cease oil production by 2035, which means the oil-dependent Tidelands Fund will dry up. Until then, revenue from oil production is expected to decline steadily, which means that projects and services the city funds with Tidelands dollars could slowly be reduced.

Complicating matters is a 2025 ballot measure that could speed up the Tidelands Fund’s demise. A state bill that would require no new oil activity within 3,200 feet of sensitive areas like schools, hospitals and homes could severely affect Long Beach’s oil production plans as the city has estimated that over half of the oil wells in the city fall within those 3,200-foot buffers.

Expensive projects like building a new pier in Belmont Shore, something the city hoped to accomplish by 2028, could require alternate funding. Another large project, the Belmont Pool rebuild, has already been scaled back in anticipation of SB 1137 being adopted by voters.

City Manager Tom Modica published a memo in December saying that the implications of the bill being approved by voters could mean losses of as much as $20 million per year in city revenue.

Advocates, though, have pushed for a faster phase-out of oil despite the economic problems it could cause for the city and have pointed to the worsening climate change markers across the globe.

Long Beach is in an interesting position, as officials say it needs to continue to produce oil in order to pay for the future abandonment of those oil wells, which will require years of forcing water back into the ground to avoid subsidence.

The price tag for the city was last estimated at $154 million, with the city only having set aside about $70 million toward that cost.

So many vacancies

This year has been marked by staffing shortages across the city leading to library closures, trash days being skipped due to a lack of drivers, and firefighters speaking out against mandatory overtime caused by vacancies that is creating work safety issues.

City officials are currently negotiating a contract with the International Association of Machinists and Aerospace Workers (IAM), which is the largest city employee union, representing over 2,800 members, including ambulance drivers, trash truck operators and librarians.

Last year, IAM successfully pushed the City Council to approve a one-time $5.8 million retention fund to help pay for a cost-of-living increase. The new contract could include raises for IAM’s members, and potentially bonus packages that the city has offered to other unions.

When the City Council approved the new three-year contract for the LBPD in October, it included not only pay raises, but incentives for officer recruitment. Officers can earn $3,000 for any recruit that they refer who successfully passes the academy and $4,000 if that officer serves at least six months and passes probation.

Officers were also offered $5,000 retention bonuses and escalating longevity pay for officers who stay with the department more than 10 years.

The city is currently offering up to $6,000 in bonuses in an attempt to fill its trash truck operator vacancies.

Long Beach’s projected budget deficit shrinks significantly, but concerns remain for the future

Jason Ruiz covers City Hall and politics for the Long Beach Post. Reach him at [email protected] or @JasonRuiz_LB on Twitter.