Five Inconvenient Truths About City Hall's Projected FY14 Budget "Surplus"

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(Mar. 18, 2013) -- Below are what we consider some inconvenient truths about City Hall's recently announced General Fund budget surplus in FY14. The figures were reported by City of Long Beach staff at a March 12 City Council study session. The words below are our own.

1. The surplus results from City Hall receiving $25.6 million in "one time" property tax revenue and $10.7 million in ongoing property tax revenue because Sacramento ended Redevelopment. Mayor Foster and the City Council lambasted and fought Sacramento's action that ended Redevelopment. If Mayor Foster and the City Council had prevailed in stopping what Sacramento did, Long Beach wouldn't have a projected General Fund surplus in FY14.
2. The budget actions Mayor Foster advocated and a Council majority enacted (including cutting police, fire and other services and insisting on pension changes from City Hall unions) didn't produce a surplus. They don't produce sufficient savings to offset Long Beach City Hall's continued General Fund spending exceeding revenue. Prior to the Redevelopment-property tax windfall, City Hall projected deficits of $10.9 million in FY14 and $6.4 million in FY15.
3. Even WITH the Redevelopment property tax windfall PLUS cutting police and fire services PLUS pension reform, City Hall management acknowledges that its deficit will return -- after the 2014 election cycle -- in FY15 (Oct. 2014) with $4.9 million in spending exceeding revenue.
4. Long Beach taxpayers may pay as much as $7.8 million in one time General Fund costs and as much as $4.0 million in ongoing General Fund costs because City Hall chose to become Successor Agency to LB's dissolved Redevelopment Agency. City staff acknowledges these figures but would likely point out that LB received $734 million in project and obligation approvals from Sacramento that might not have happened if LB let some other entity become LB RDA's Successor Agency. We have objected to the Mayor and Council deciding the Successor Agency issue without public input and a publicly recorded vote; instead, the Council held a closed session (Schipske absent) that cited "ongoing litigation" (listing the CA Supreme Court Redevelopment opinion that ended the case a month earlier to which the City of LB wasn't a formal litigation party). LBREPORT.com lodged a complaint with the District Attorney's office alleging that City Hall violated the Brown "Open Meetings" Act; the DA's Public Integrity section replied that in its opinion, the City's actions didn't violate the Brown Act.
5. City management acknowledges that its projections are subject to possible additional charges from the Public Employee Retirement System (if PERS' investment income turns out to be less than its arguably rosy projections, plus future wage increases), future wage increases and unfunded liabilities...but with possible increased ambulance revenues.