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City Mgt Memo Says Sac'to Could Derail LB Deficit Reduction Plan, Making It Hard To Avoid Cutting Police, Fire, Libraries & Core Services
(July 5, 2003, text updated July 7) -- In a monthly budget performance report agendized for the July 8 City Council meeting, City Manager Jerry Miller has approved a memo by City Hall Director of Financial Management Robert Torrez which says possible actions in Sacramento -- still uncertain and changing daily -- could derail city management's plan to reduce the Fuming at developments in the state capital, the memo states in part:
If the State reduces local government revenues we will no longer be able to protect core
services and will have to include potential closures of branch libraries, reductions in park
programs (including youth and seniors) and reduced staffing for safety services.
In the memo (which LBReport.com posts in full on a link below), city management says City Hall funds are (with some possibly transitory exceptions) performing fairly close to expectations...but at least two possible state scenarios could have potentially serious local consequences:
The city management memo says:
The memo adds:
The memo notes that steps are being taken to "rebuild" City Hall's Insurance Fund balance...which city management revealed in April had been depleted to only roughly $3 million. The FY 03 ending Insurance Fund balance is expected to be approximately $6 million,
which includes an additional $3 million in revenue from additional charges to departments in
FY 03 and the elimination of a budgeted operating transfer to the General Fund. As
explained in the April report, these efforts are being taken to address increasing insurance
costs and rebuild the fund balance to support future liabilities. In consultation with the City Attorney and City Auditor, a multi-year plan will be developed to rebuild the Insurance Fund. The need for this plan will also be addressed in the soon to be initiated consultant study. In FY 04, as a first phase, charges to departments are budgeted to fully cover current
Insurance Fund costs. The affect of these increased charges on programs, services and
funds are currently under review. The consultant's recommendation will be taken into
consideration in rebuilding reserves for FY 05 and beyond. The memo reminds the Council that city management said in April that higher workers comp, liability and medical insurance costs, plus other operating costs (including increases in equipment maintenance service contracts) will boost the projected FY 04 General Fund Staff has been working feverishly on several initiatives that, if successful, could help bridge part of the growing gap until additional reductions can be identified, thereby avoiding more severe budget cuts.
Recent events with regard to State proposals to take millions of dollars of Long Beach
revenues is, to say the least, discouraging. The State's inability, or unwillingness, to deal
with its budget problems in an appropriate manner, by reducing costs and raising taxes, will
result in significant changes to local government services throughout the State. Cities,
including Long Beach, will no longer be able to provide the kinds of services that our
citizens take for granted. Many of us have traveled to Sacramento to lobby and to testify in
support of local government. Unfortunately, the group that stands to suffer the most, our
citizens, have been largely silent throughout this political fiasco. There has never been a
more desperate time for cities and counties.
If the State reduces local government revenues we will no longer be able to protect core
services and will have to include potential closures of branch libraries, reductions in park
programs (including youth and seniors) and reduced staffing for safety services.
The memo can be viewed at May '03 budget performance update
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