The Mayor's office and city management quietly sought the grant in October 2014 without public Council or taxpayer discussion to fund an "innovation team" that would operate out of the Mayor's and City Manager's offices [without indications of routine public or Council direction or oversight.]

General Fund revenue is legally unencumbered and can be used by the Council for police, fire, parks, libraries, infrastructure or multiple other items.

[Scroll down for further]

To deal with the first year of grant match, city management proposes that the Council 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 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."

The million dollar General Fund taxpayer cost for the "innovation grant" wasn't mentioned in City press releases or social dispatches and mass emails from the Mayor's office annoucning the grant award in mid-December 2014 [and to our knowledge no other LB media outlet reported the matter.] LBREPORT.com used state freedom of information law to obtain documents related to the grant application that showed Bloomberg Philanthropies informed the Mayor's office and city management prior to applying for the grant of the $1 million local match requirement. In his Jan. 13, 2015 "State of the City" message, Mayor Garcia (again) cited the Bloomberg grant but (again) didn't mention the $1 million General Fund taxpayer cost or how it would be paid...which management now seeks Council approval to do (text below.)

[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' granta 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, but to this point not in the context of accepting a Mayor/Manager controlled $3 million sum requiring a $1 million expenditure from LB's General Fund.

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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

The grant application was prepared and submitted within a relatively short period of time. Bloomberg Philanthropies launched the application process on August 20. On September 24, a Bloomberg Philanthropies staffer emailed Mayor Garcia's Chief of Staff, Mark Taylor, and urged Mayor Garcia's office to apply for the grant. "We're definitely interested in applying," Mr. Taylor replied within minutes.

The application was apparently prepared in part by a management assistant whose emailed correspondence to Bloomberg Philanthropies don't include any visible cc's. On October 3, the management assistant asked if a Bloomberg staffer "could clarify some questions we have regarding the matching requirement."

[City Mgmt assistant's Oct. 3 email] When would a grantee city be expected to identify matching funds for this program? Would this be expected prior to the award of the grant?

In addition from reading the [Bloomberg materials] FAQ, it appears to state that the grantee city can wait until the beginning of the third year of the grant to utilize matching funds. Is this a correct interpretation?

Finally, can the city use in-kind staff time that are dedicated to the project as a match?

Bloomberg Philanthropies responded (with attachments also cited below):

[Bloomberg Philanthropies reply, emphasis in original] We have included the information about the match to be transparent in our expectations. Your city's ability to meet the matching requirement is not relevant to our selection process. The application does not include any questions about how to satisfy the match, and applications will not be evaluated on this basis. Once selected, we will work with winning cities over the first two years of the grant to determine what qualifies as a match, and to satisfy the matching requirement. Each of the pioneer cities met or exceeded their match in the first two years of their work without problem.

On October 6 (the application deadline date), Mayor Garcia's Chief of Staff Mark Taylor emailed the grant application to Bloomberg Philanthropies, In November, Bloomberg submitted follow-up questions to which the Mayor's office replied.

On December 15, Bloomberg Philanthropies announced its grant awardees and Mayor Garcia and his office and city management issued media releases, email alerts and social network dispatches that didn't mention the million dollar local match requirement. LBREPORT.com only learned of this after making a state freedom of information request.