Long Beach will invest $4.6 million of excess revenue from a previous fiscal year into a variety of projects, including a planned renovation of a motel into temporary housing, legal support for tenants and undocumented residents, and a trailhead at Willow Springs Park.
The city regularly recalibrates its budget projections with mid-year and year-end updates, which can unlock additional dollars for city projects.
This year, the largest chunk of funding will be put toward the conversion of the Luxury Inn Motel in North Long Beach, which the city is expected to start construction on this month after facing delays in 2023.
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Long Beach bought the site for $16.6 million in September 2022 with the intention of turning the 78-room motel into temporary housing for unhoused people. A city document said that facility renovations are expected to cost about $2.5 million more than originally anticipated and the city will use $790,000 in leftover 2023 funding to help close that gap.
Another $771,667 leftover from unspent funds in the City Council office budgets will be distributed to individual council offices to spend on priority projects within their districts this year. The Billie Jean King Library Downtown will get $723,000 for improvements to its terrace, something a city report said is needed to support community programming and “enhance the usability of the open space” around the library.
Smaller allocations will go toward bolstering the city’s legal aid fund for tenants facing eviction ($500,000), providing more funding for spay and neuter services at the animal shelter ($250,000) and another $250,000 to help drive more grant funding to the city to construct a trail system at Willow Springs Park.
Nader Kaamoush, a budget manager for the city, told the council Tuesday that while some key revenue sources like property taxes, sales tax and Measure A all finished lower than expected, funds saved in the 2023 budget could help the city close the projected $28 million deficit forecasted for the fiscal year starting in October.
Kaamoush said that the city has about $20.9 million in funds leftover from the Long Beach Recovery Act, the city’s COVID-19 relief fund, and money it expected to spend on labor costs that could help lessen the potential cuts to services that could be required if the projected deficit persists.
“With the two balances of those reserves, we’re hopeful that they will help cover the early projection of $28 million shortfall in FY25,” he said.
The City Council will get an updated projected shortfall in March but in recent years the city has seen original projected shortfalls shrink. The 2023 fiscal year was originally projected to have a $19.6 million deficit.
However, Long Beach is heading into potentially uncharted territory as the loss of oil revenue could be hastened by a state law that voters will decide in the November election, something the city has said could cost it about $20 million annually.
In 2023, property taxes, sales tax and Measure A revenue, three of the city’s four top revenue streams finished below final projects by a combined $9.1 million, according to city budget documents.