(Nov. 17, 2008) -- In a publicly released memo, city management says City Hall's FY 09 budget -- passed by the City Council on September 9 (8-1, Schipske dissenting) -- may end up $8 million to $10 million in the red due to the "precipitous and unprecedented decline in the economy since the beginning of the fiscal year [which] has changed the City's outlook regarding the General Fund's revenue performance over the next 12 months."

In her memo accompanying an item agendized at the Nov. 18 City Council meeting, Assistant City Manager Suzanne Frick says:

While the actual impact will not be known and will be difficult to project until the financial markets stabilize, several key ongoing revenue sources are susceptible to the influences of the economy and are projected to come in below budgeted levels . These include property, sales, vehicle license, and utility user taxes, along with uplands oil revenue and interest earned from the City's investment pool. With one month of revenue received and the current price of oil at $47/bbl (as of November 12, 2008), it is currently projected that General Fund revenue may come in between $8 million to $10 million below budget in FY 09.

Responding to a September City Council request for options to restore four full-time Park Rangers (cut by the Council to produce a nominally balanced budget), Assistant City Manager Frick's memo recommends against restoring four full-time Park Rangers (cost: $355,242 from General Fund resources) and instead recommends an "alternative delivery model" suggested by the Council's Budget Oversight Committee (details below).

Management also recommends against making 10% spending cuts in all (not just some) City Departments, an option also requested by the Council (motion by Councilwoman Gerrie Schipske) in September. In place of the 10% reductions, management proposes reductions suggested in September by the Council's Budget Oversight Committee but not accepted by the full Council in enacting its budget.

The Commiittee's suggested cuts included further reducing LBPD Youth Services ($105,000), eliminate remaining Jr . Concert Band funding (lease on practice/storage facility, 90,000), eliminate support for Parades (Veteran's Day and Daisy Lane, total $79,000), further reduce Police Department Community Relations ($70,000), and reduce non-POST Police Department travel ($60,550) for total reductions of $404,500.

City management's November agendized memo follows a non-agendized October memo from management to the Mayor and Council in late October (obtained and published at the time by LBReport.com) which indicated management is taking a number of measures immediately...and recommends exploring mandatory five-day employee furloughs (a meet and confer item with city employee unions) (recapped below).

Councilwoman Schipske has previously called for examining the possibility of city employee furloughs.

Management said in October that its measures being taken immediately include putting non-essential one-time expenses on hold until further notice, hastening out the contracting out trades and eliminating non-City Charter required commissions.

Management added in its October non-agendized memo that it was unclear if these measures could avoid mid-year budget cuts.

Management's October memo came to light after Councilwoman Gerrie Schipske referred to it during her monthly "Wake Up Long Beach" event...and LBReport.com requested the memo from management (which provided it promptly). To view LBReport.com's coverage of the October memo, click here.

In management's publicly agendized November memo, Assistant City Manager Frick writes in pertinent part:

On September 9, 2008, during final deliberations regarding the Fiscal Year 2009 (FY 09) budget, the City Council asked staff to explore potential opportunities for additional revenue enhancements or budget reductions with which to add four full-time Park Rangers to the budget, bringing Park Ranger staffing to nine full-time positions and restoring the Citywide Park Ranger program . Particular attention was to be paid to departments that were not asked to provide structural deficit solutions equaling 10 percent of their discretionary budgets .

The requested addition of four full-time Park Rangers would require an additional $355,242 in General Fund resources. Per the City Council's request, the City Manager met with staff from the Departments of Parks, Recreation and Marine, Financial Management, and Police over the past several weeks to identify any available resources to support this request, or at a minimum, an alternate service delivery model to achieve the City Council's desired outcome .

Additional Revenue Options

The precipitous and unprecedented decline in the economy since the beginning of the fiscal year has changed the City's outlook regarding the General Fund's revenue performance over the next 12 months . While the actual impact will not be known and will be difficult to project until the financial markets stabilize, several key ongoing revenue sources are susceptible to the influences of the economy and are projected to come in below budgeted levels . These include property, sales, vehicle license, and utility user taxes, along with uplands oil revenue and interest earned from the City's investment pool. With one month of revenue received and the current price of oil at $47/bbl (as of November 12, 2008), it is currently projected that General Fund revenue may come in between $8 million to $10 million below budget in FY 09 . Therefore, it is not anticipated that the General Fund will have any available structural revenue with which to support the requested Park Ranger program enhancement .

Additional Expenditure Reductions

The City of Long Beach prescribed a savings target to General Fund and related fund departments to generate a wide range of viable solutions and options for the City Manager to eliminate the $16 .9 million projected structural deficit for FY 09 . This target equaled approximately 10 percent of each department's discretionary base budget, and could be met by departments with either cuts or new revenue solutions . However, this by no means was indicative of a desire or intent to employ an across-the-board budget cutting strategy, recognizing that it is an ineffective means of downsizing the organization, weakening the organization as a whole rather than providing needed resources in priority and high-performing programs .

The following chart demonstrates the percentage of solutions provided by General Fund and related fund departments as well as the final percentage approved by the City Council .

Department	% Submitted	% Accepted
Legislative	-6%	-10%
City Attorney	-10%	-10%
City Auditor	-7%	-10%
City Clerk	-8%	-15%
City Prosecutor	0%	-6%
City Manager	-16%	-16%
Community Development	-10%	-16%
Development Services	-8%	-11%
Financial Management	-12%	-17%
Fire*	-12%	-4%
Health & Human Services	-12%	-8%
Human Resources	-13%	-15%
Library Services	-10%	-11%
Parks, Recreation & Marine	-10%	-5%
Police*	-9%	-5%
Public Works	-7%	-9%
Technology Services	-13%	-3%
	9%	10%

* Percentage applied to non-sworn Police and Fire budgets only
** "Civil Service was exempt from FY 09 reductions, $650,000 was reduced in FY 08

Staff does not recommend the City Council make additional reductions in department services to support the Park Ranger enhancement . However, while seven departments were not asked to provide structural deficit solutions up to 10 percent of their budget, should the City Council want reduction options to consider, staff would suggest the following reductions recommended by the Budget Oversight Committee that were considered but not approved by the City Council during budget adoption:

Further reduce Police Department Youth Services	$105,000
Eliminate remaining Jr . Concert Band funding (lease on practice/storage facility)	$90,000
Eliminate support for Parades (Veteran's Day and Daisy Lane)	$79,000
Further reduce Police Department Community Relations	$70,000
Reduce non-POST Police Department travel	$60,550
	Total $404,550

Alternate Service Delivery Model

Rather than making further budget reductions, staff recommends that park safety be achieved using a two-pronged approach utilizing currently budgeted resources. The Department of Parks, Recreation and Marine will utilize its five full-time Park Rangers to provide services to the El Dorado Regional Park, as well as provide additional patrols to high-demand local parks, including El Dorado West and Heartwell. This should provide the additional support needed at these nearby parks without compromising safety at the El Dorado Regional Park. The Police Department, as part of its regular patrol deployment and responsibilities, will provide emergency response to the remaining City parks. This recommendation will result in two full-time rangers being transferred to Parks, Recreation and Marine's Special Events and Filming Bureau to assist with security needs in that operation.

A police lieutenant has been assigned to the Department of Parks, Recreation and Marine the past few years in order to provide oversight for the Park Ranger program . The lieutenant will continue to supervise the Park Rangers in El Dorado Regional Park and Special Events and Filming . Moreover, the lieutenant's presence in Parks, Recreation and Marine will play a key role in this integrated approach with the Police Department, which more effectively utilizes limited Park Ranger resources with the addition of the Police Department to provide a consistent Citywide park safety program.