Friday, 20 July 2012

FY13 Budget Process

Public News

2100 Hits

UPDATED AUGUST 28, 2012

THE BUDGET PROCESS

The City of Long Beach has a fiscal year that runs from October 1st to September 30. The FY13 budget process began in January 2012 with a series of Budget Oversight Committee (BOC) meetings. The BOC consists of three City Council members and they receive information from the City Manager's office. By the end of May, each city department is required to give their budget proposals for the next fiscal year to the City Manager. The City Manager makes changes that he deems necessary and then submits his budget proposal to the Mayor by the first week of July. The Mayor makes his suggestions and changes for the next several weeks, and he must submit his proposed budget to the City Council before the first week of August. When the Mayor announces his budget, it is the first time the public and the City Council get a full accounting of the upcoming expenditures and cuts. This typically begins a very heated process of vetting out the budget; however, the City Council must adopt a balanced budget no later than the middle of September. The Mayor has five days after the budget is adopted to exercise a line-item veto on any expenditure, and the City Council has the authority to override the Mayor's veto. The final budget takes effect at 0001 hours on October 1st.

SIGNFICANT EVENTS

On January 31, 2012, the Long Beach City Council's Public Safety Committee met for the first time since November 10, 2010, to discuss the need for a new police academy. The three-person committee eventually voted 2-1 to delay any immediate recommendation for an academy to the full City Council. Instead, the committee elected to direct the City Manager to return to them in a month with a report on the budget and recommendations on how to fund future academies in outlaying years. The vote essentially killed any chance for a police academy to begin in October 2012 and virtually assured the department of having staffing numbers approaching 750 within the next two years. The web news service LBReport.com published a series of stories about the vote. Click on the links below to read/view the stories:

On March 6, 2012, the Long Beach City Council met in special session for its first discussion of the FY13 budget. The presentation included a special discussion on a proposed police academy. The vast majority of the discusssion was regarding the fiscal deficit expected over the next three years. Attached is the power point presented to the City Council during that discussion:

On April 26, 2012, LBReport.Com was the first to report that Long Beach Police management was considering the consolidation of Patrol Divisions and the reduction in Patrol Beats. This would mean reduced patrol staffing resulting in a greater safety risk to both the community and our officers. At a time when Long Beach crime is soaring by double-digits, this move seems to be both imprudent and dangerous.

On June 19 and July 3, the City Council recieved a series of presentations from a consulting group called Management Partners. The City paid the company approximately $85,000 to review our budget process and compare our City to other cites. It quickly became clear that the company's methodologies were suspect and several councilmembers questioned if the group was actually comparing apples to apples. Additionally, further inspection of the data showed that the group had hand selected comparison cities without any explaination as to why others were eliminated. We noted that Los Angeles, San Jose, and San Francisco were not included.

On June 27, 2012, First District Councilman Robert Garcia publically stated that he would not vote for any FY13 budget that did not include a police academy.

On July 16, 2012, the Chief of Police held a series of meetings with LBPD employees to announce his proposed cuts for FY13. The City of Long Beach anticipates having a 17.2 million dollar FY13 structural deficit (up from 16.5 million that was originally projected). The Police Department has been tasked with cutting 8.7 million dollars as its part of the City's overall budget reduction. In order to meet that goal, the Chief announced that the following changes and cuts were planned:

DEPARTMENT CHANGES

Elimination of the lease at 11 Golden Shore

Elimination of the lease at the former North PAL facility at 2311 South Street

Merge South and West Division into one new combined division.

(40) SWORN POSITIONS ELIMINATED

(1) South Division Commander position

(1) South Division Admin Officer position

(5) South Division Directed Enforcement Team

(2) Gang Detail Sergeant positions

(20) Gang Detail detective positions

(2) Homicide detective positions

(1) Vice Sergeant (the Warrant Detail position)

(2) Vice Detective positions (Warrant Detail positions)

(3) AOTC officer positions

(2) Violent Predator Unit positions

(1) Sergeant from the Support Admin, Prisoner Transport, Business Desk

(32) CIVILIAN POSITIONS ELIMINATED

Employee Services Office:

(1) Department Psychologist

(1) Clerk Typist

Other Clerk Typist positions:

(1) South Division Clerk Typist

(1) AOTC Clerk Typist

(3) Bureau Offices (reduction to one in each Bureau)

Police Service Specialist (PSS) positions:

(1) Vice Detail (Warrant Unit)

(1) Gang Detail

(1) Burglary Detail

(1) Sex Crimes Detail

(1) Crime Lab

(1) Domestic Violence Detail

(1) Violent Crimes Detail

(1) West Division Crime Analyst

(1) East Division Crime Analyst

(5) Each Patrol Division’s PSS

Admin Analyst positions:

(2) Bureau Budget Analyst position (staff reduced from 4 to 2)

Support Admin/Prisoner Transport/Business Desk:

(4) Special Services Officers

(5) Police Service Specialists

On July 22, 2012, the Press-Telegram newspaper printed its first article of the budget cycle listing the specific proposed cuts to the Police Department. The Chief-of-Police is quoted as saying, "We no longer have the numbers to continue working in the same capacity as we have in the past," and LBPOA President Steve James reminds readers of the inherent dangers of the City's 'proportional share' model of budgeting. Both leaders stress the importance of starting a police academy in order to keep police staffing from dropping below 760 officers (we are currently hovering around 805).

On August 1, 2012, the Mayor and City Manager publically announced their FY13 budget plan. Over the next several weeks, the City Council will make changes and recommendations to the budget, and the final budget will be adopted by September 15, 2012. During today's presentation, the Mayor verified that he intended to fund a police academy in FY13. Additionally, the Mayor proposed a comprehensive review of specialty skill pay, stand-by pay, overtime, and other issues. Many of these issues are already secured in our contract through 2016. The Mayor also announced that the Port will be funding seven police positions (one commander and seven officers) to enhance our Port Security Unit. It appears that the City is going to carve out a large part of Beat 2 that will act as an independant patrol area completely funded by the Port (more details to follow). This change will reduce the number of sworn cuts from 40 officers to 33. For further on the proposed budget, click on the links below:

CITY OF LONG BEACH BUDGET DOCUMENTS:

RELATED NEWS ARTICLES

On August 7, 2012, the City Manager presented his FY13 Budget to the City Council for the first time. Additionally, he presented his recommendations on how to spend the 17 million dollars in additional oil revenue on one-time expenses. The Police Department will get 3.1 million dollars of the oil money to fund a 40-person academy. The City Manager directed the Chief to begin the process of starting an academy immediately, and we have already seen the watch reports issued for new tac-staff positions. Unfortunately, the budget also resulted in a 3 million dollar cut in the department's overtime budget. We will spend 10.3 million dollars in overtime in FY12, but we are only slated for 7 million in FY13. Essentially, the same money cut from overtime was shifted to pay for an academy. The problem becomes - it is essentially impossible for the department to cut 3 million dollars off out current overtime usage. The combination of court requirements, special event requirements, and operational needs, we just do not have any fat to cut. At the end of the budget session, LBPOA President Steve James spoke and gave the City Council notice that if they did not adjust the budget, they should expect the department to come in 3 million dollars over budget in overtime at the end of FY13.

On August 14, 2012, the City Council received a detailed briefing from the Chief of Police on the proposed cuts to the department. The chief clearly pointed out that the cuts were going to hurt the department's ability to provide quality service to the community. LBPOA President Steve James spoke at the conclusion of the presentation and explained that the department would not be able to meet the City's budgeted overtime goal The department is going to spend approximately 10.5 million in overtime in FY12. That cost will be covered by the budgeted overtime and a supplemental amount of money from FY12 one-time oil revenue. However, the City did not add any supplemental oil money to the FY13 budget. The City only budgeted about 7.3 million in the FY13 budget, and that will not be enough. The Budget Oversight Committee (BOC) met the next day (08/15/12) and discussed the overtime issue again. They agreed that it seemed illogical to under-budget police overtime when you know it is an unrealistic expectation.

On August 28, 2012, the City Council met to discuss how they intended to spend the $16.9 million dollars in one-time oil revenue that accumulated over the last fiscal year. This was an extremely important meeting because part of the funds were slated to pay for the FY13 Police Academy. The highlights of the meeting included:

City management explained where the extra one-time money comes from (only 10.9 million comes from oil money generated about the budgeted price per barrel)
With Uplands Oil, 55% of our revenue comes from the sale price and 45% comes from a fee on the cost of drilling
The number of oil wells being drilled is decreasing, and that is causing some decline in the oil revenue
The average price per barrel of oil in FY11 was $97 per barrel (was assumed at $55/barrel in budget)
Every $5 increase in the estimated budget price of oil is an add of $1.3M to the General Fund (and a decrease of $1.3 in the one-time money)
They listed the Mayor's recommendations for one-time money usage (includes our academy)
CLICK HERE TO SEE THE COUNCIL POWERPOINT ON ONE TIME REVENUE SPENDING

Without any prior notice, The City Manager announced that he had some new information. He explained that the City had found $2.7 million dollars in new money for the budget. This is not one-time money. This is on-going new revenue that can be added to on-going expenses. He found the money by doing the following:

$1.3 million by increasing the estimated price of Upland oil in FY13 up to $70 per barrel (up from the original FY13 budgeted price of $65 and up from the FY12 price of $55)
$1.0 million by cutting 1/3 of the sidewalk repair program
$200k savings from changes to our Enterprise Fund for finance recovery (no idea what that is)
$125k savings because City Light and Power agreed to a 5% contract cut
$75k savings from Tech Services enhancement savings (whatever)
$30k in money after the City found out that the Water Department was getting money from the phone company because they had a cell tower on their property…however, the tower was actually on City property, so now the City's General Fund will now get the money.
CLICK HERE TO SEE THE CITY MANAGER PRESENTATION AND PROPOSED EXPENDITURES

After great discussion, the City Council referred the matter back to the Budget Oversight Committee for review. The committee will come up with a list of recommended expenditures that they will then present to the entire Council for review on Tuesday, September 4.

WE WILL KEEP YOU POSTED AS NEW INFORMATION BECOMES AVAILABLE