The $1 million taxpayer cost wasn't publicly disclosed when the Mayor's office and city management quietly applied for the grant, or in press releases, mass emailings and social network dispatches from the Mayor/Mgm't announcing receipt of the grant. LBREPORT.com reported (first again) the taxpayer cost using information obtained by using state freedom of information law to access City documents.

LBREPORT.com's coverage detailed the $1 million cost and representations made by the Mayor's office and city management in seeking the grant [LBREPORT.com coverage here.] On January 13, 2015 Mayor Garcia cited receipt of the grant in his "State of the City" message without mentioning its $1 million taxpayer cost.

City management acknowledged the cost when it agendized the Feb. 3 Council item seeking Council authority to allocate the $1 million sum.

[Scroll down for further]

The Council vote effectively enables the Mayor's office and city management to control use of the $4 million total for projects they say will first focus on unspecified "economic development." Mayor/Management's agendizing memo didn't tell the public or Councilmembers where, when, what or for whom the sums would be spent to promote "economic development"...and no Councilmembers inquired about it

Assistant City Manager Tom Modica spoke briefly and indicated the grant could [paraphrase] help create efficiencies that would help the City in addressing upcoming deficits. Several Councilmembers commended Mayor Garcia for seeking the grant and echoed city management enthusiasm. City management's agendizing memo didn't state, and no Councilmember inquired, whether the $1 million in taxpayer funds expended would in fact produce innovations resulting in at least $1 million in taxpayer savings, or $1 million in new taxpayer revenue.

The Council vote approved a management plan to spend $400,000 in uplands oil surplus and then consume part of $2,000,000 of FY 14 General Fund department savings to create a new "Innovation and Efficiency Initiatives revolving fund" a portion of which would be used "to support the implementatiuon of i-team solutions and meet grant requirements."

[As previously reported by LBREPORT.com, on December 31, Financial Management Director Gross separately sent the Mayor and Council a memo, stating in pertinent part that it's likely there'd be no one-time FY16 oil revenue and "it also appears likely that the transfer to the General Fund could be adversely impacted by several million dollars."]

[Text from city management Feb. 3, 2015 agendizing memo] FISCAL IMPACT

Cities are expected to match the grant at a 1:3 ratio (1 matched dollar for every 3 grant dollars), with half of the required match raised by February 1, 2016 and the balance identified by February 1, 2017. Eligible matched funds may be used for implementation costs associated with initiatives developed by the i-team. In addition, the final year of grant funding is contingent upon securing public funding to sustain the Innovation Team Director or a senior level i-team member beyond the grant term by no later than December 31,2016.

To address the first year grant match, the City Manager has identified $400,000 in funds from the Uplands FY 14 Year-End Surplus. In addition, the City Manager is recommending that $2,000,000 of FY 14 General Fund department savings be dedicated to creating a new Innovation and Efficiency Initiatives revolving fund. A portion of these funds will be directed to support the implementation of i-team solutions and meet grant requirements. In 2015, the Office of the City Manager will identify the funding required for the Innovation Team Director or senior level i-team member beyond the grant term. Funding for FY16 and FY17 will be handled through the annual budget process. Up to eight new FTE positions will be created as a result of this recommended action.

Management's memo doesn't indicate for what uses, if any, the General Fund sums were previously planned or considered.

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As previously reported by LBREPORT.com, in seeking the $3 million grant, the Mayor/management grant application told Bloomberg Philanthropies that LB's Mayor "sets citywide policy direction" when, under the City Charter, the Mayor actually has no independent legal power to set policy citywide or otherwise. The City Council sets city policy, subject to a Mayoral veto that six Councilmembers can override.

As previously reported by LBREPORT.com, an organizational chart (below) submitted to Bloomberg Philanthropies in seeking the grant didn't indicate a Council role in using the grant proceeds and didn't indicate routine visible means for public and press oversight in using the grant proceeds. City management's agendizing memo tells the Council: "The Innovation Team will reside in the City Manager's Office, and an Innovation Deputy will reside in the Mayor's Office" and doesn't mention any role for the policy setting City Council.

Image: Mayor Garcia office Bloomberg grant application attachment

The Mayor/management grant application told Bloomberg Philanthropies that the grant's "innovation delivery" process will be used to make "economic development" part of "everyone's job" at City Hall. It further indicated that city staff will come to "see their role as serving as a concierge to those who want to business in Long Beach." [City management has previously said it is addressing public safety by making public safety a part of everyone's job in various city departments.]

The grant application doesn't indicate what type(s) of economic development will be involved or in what part(s) of the city they will (or won't) be located.

(Bloomberg Philanthropies' grant application materials indicated that grantee cities were free to select issues of their choosing which could range from [cited as examples in Bloomberg materials] crime reduction, energy sustainability, economic growth, homelessness or other broad issues of local importance.)

Mayor Garcia has previously said "economic development" is one of his priorities and several Councilmembers have said likewise.

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Below is the text of city management's Feb. 3 agendizing memo:

RECOMMENDATION:

Authorize the City Manager to execute all necessary documents, and any necessary amendments, to receive and expend grant funding from Bloomberg Philanthropies for an amount up to $3,000,000 over a three-year period, beginning January 1, 2015 through December 31,2017;

Authorize a required cash match of $1,000,000 over the course of the grant period; and Increase appropriations in the General Grants Fund (SR 120) in the Department of the City Manager by $1,000,000. (Citywide)

DISCUSSION

The Bloomberg Philanthropies (Bloomberg) Innovation Team Grant (grant) is a private foundation grant designed to improve the capacity of City Halls to effectively design and implement new approaches that improve the lives of residents. Mayor Garcia identified this opportunity through direct discussions with Bloomberg and requested that the City Manager apply for the grant.

The grant provides cities with dedicated in-house Innovation Team (i-team) members to identify and design solutions to pressing issues. i-teams focus on applying the Bloomberg Innovation Delivery approach to enhance City services. This approach requires the i-team to work with departments to investigate major problem areas, and to facilitate the design and implementation of innovative solutions. Once solutions are adopted, the i-team moves on to identify new challenges and solutions. Bloomberg awarded the first round of $24 million in funding in 2011 to five cities: Atlanta, Chicago, Louisville, Memphis, and New Orleans. Through i-teams, all five cities have successfully implemented solutions to some of their greatest challenges, including stagnant neighborhood economic development, high murder and violence rates, and inefficient emergency services, among other initiatives.

On December 15, 2014, the City of Long Beach (City) was awarded $3,000,000 in funding to develop and implement a City i-team. This is a three-year grant beginning January 1, 2015 and ending December 31, 2017. The City will receive $1,000,000 per year for three years. Funding will provide for up to eight new City staff positions under the leadership of an Innovation Team Director across a range of disciplines, including project management, programming, design, and social sciences. These staff members will make up the City's iteam, and will be supported by Bloomberg consultants and resources available to the growing network of Innovation Delivery cities. The Innovation Team will reside in the City Manager's Office, and an Innovation Deputy will reside in the Mayor's Office.

With the acceptance of the grant, the i-team will work with City departments and external partners to implement the Bloomberg Innovation Delivery approach. As established in the grant application, the i-team's initial challenge is to improve access to City services and generate economic development citywide. Delivering innovative solutions to residents and businesses, such as a 24-hour City Hall, has increased local business openings, revitalized neighborhoods, and generated economic activity in other cities utilizing the Bloomberg approach. After completing initial projects identified in the grant, the i-team will address other priorities, including enhancing civic engagement and improving neighborhoods and business districts throughout Long Beach.

This matter was reviewed by City Attorney Charles Parkin on January 26, 2015 and by Budget Manager Lea Eriksen on January 23, 2015.

TIMING CONSIDERATIONS City Council action is requested on February 3, 2015, to allow timely implementation of program activities. Bloomberg requires an Innovation Team Director to be hired by February 27,2015.

FISCAL IMPACT Cities are expected to match the grant at a 1:3 ratio (1 matched dollar for every 3 grant dollars), with half of the required match raised by February 1, 2016 and the balance identified by February 1, 2017. Eligible matched funds may be used for implementation costs associated with initiatives developed by the i-team. In addition, the final year of grant funding is contingent upon securing public funding to sustain the Innovation Team Director or a senior level i-team member beyond the grant term by no later than December 31,2016. To address the first year grant match, the City Manager has identified $400,000 in funds from the Uplands FY 14 Year-End Surplus. In addition, the City Manager is recommending that $2,000,000 of FY 14 General Fund department savings be dedicated to creating a new Innovation and Efficiency Initiatives revolving fund. A portion of these funds will be directed to support the implementation of i-team solutions and meet grant requirements. In 2015, the Office of the City Manager will identify the funding required for the Innovation Team Director or senior level i-team member beyond the grant term. Funding for FY16 and FY17 will be handled through the annual budget process. Up to eight new FTE positions will be created as a result of this recommended action.

SUGGESTED ACTION:

Approve recommendation.

Respectfully submitted,

PATRICK H. WEST, CITY MANAGER

JOHN GROSS, DIRECTOR OF FINANCIAL MANAGEMENT

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