While Long Beach City Hall Bemoans Budget Deficit (Spending Exceeding Revenue), Blames COVID-19 And Risks Spending Part Of City's Emergency Reserves, Neighboring Lakewood (Also Facing COVID-19) Shows Budget SURPLUS
|(February 14, 2012, 9:40 p.m.) -- While Long Beach city management prepares to tell the City Council on Feb, 16 that the City faces a near $20 million "deficit" (spending exceeding revenue) for which it proposes to draw down part of the City's Emergency Reserves, the neighboring City of Lakewood's city management has informed its City Council that despite COVID, their City has a budget surplus...and it's 45% larger than initially anticipated..
Compare what Long Beach and Lakewood taxpayers heard in reports presented their respective city managers to the two cities' spending-deciding City Councils.
So what explains the difference?
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It's not one single factor, but one major difference is that Lakewood is a contract++++ city. It has relatively few employees and "contracts out" (hires) various entities (some from government [LASD, LA County Fire], some from private industry) to provide services to Lakewood taxpayers. That means Lakewood Councilmembers aren't subject to campaign contributions from self-interested city employee unions. In contrast, Long Beach has a large number of city employees, represented by unions that spend large sums to elect and/or reelect Mayors and Councilmembers who approve union contracts that include taxpayer costly raises and pension fatteners.
One of the more notorious examples was the 2002 pension spike approved under then-Mayor Beverly O'Neill, an action that continues to harm LB taxpayers to this day. With O'Neill presiding, the pension spike was agendized for two enactment votes: one on the final day of an outgoing Council and the second on the first day if an incoming one. Amid farewells and inaugurations, the Council votes were unanimous barely noted, although reported by LBREPORT.com at the time. Then-incoming Councilman Val Lerch has since repeatedly apologized for his first-day Council vote; O'Neill (who was among city employees benefiting from the pension spike) has to our knowledge not apologized for the action.
In 2006, Mayoral candidate Doug Drummond first described the taxpayer consequences as "pension potholes," a term subsequently appropriated by runoff candidate Bob Foster. After Foster's 2006 election (endorsed by LB's police, firefighter and IAM-non-pubklic safety unions) he supported a 2007 contract reopener with LB's police union with raises and other benefits (telling the public it would help retain experienced officers) and supported new 2008 contracts with Firefighters and IAM-non public safety employees None of these contractual actions included pension reforms (urged annually by LB Taxpayers Ass'n co-founder Tom Stout [deceased Dec, 2020.])
When the 2008 contracts reached the Council for approval, then-Councilwoman Rae Gabelich famously angered Mayor Foster by turning to face City Manager Pat West and asking "How are we going to pay for this?" (His answer didn't satisfy Ms, Gabelich who was the only Council incumbent to vote against both 2008 contracts.)
When the economic slowdown arrived in fall 2008, the Foster-applauded contracts became unsustainable and Foster responded by seeking and receiving contract do-overs that now include some long-term pension reforms. However the immediate taxpayer damage was already done and Foster (and a Council that by spring 2009 included Councilman Robert Garcia) began the largest reduction in police officers in the more than 100 year history of the City of Long Beach, Between 2009-2015, the Council erased 208 budgeted positions (including LB's field anti-gang unit.) Under Mayor Garcia (took office mid-2014) 22 officer positions were restored after LB voters approved the 2016 Measure A sales tax increase, but those positions have since been erased by a Sept. 2020 defunding of 48 officers (Council vote 9-0) following the Minneapolis PD killing of George Floyd.
Apart from union influences, Long Beach Councilmembers have independently enabled taxpayer-unfriendly spending items whose costs are among those now reflected in LB city management's Feb 16, 2021 "deficit" memo. Can you identify the controversial spending item in this budget-speak memo text
...Other sources of funds totaled $27.52 million in FY 20. The majority of these other sources are comprised of the release of reserves set aside in FY 19 to fund City Council-approved expenditures that were anticipated to occur in FY 20, such as the FY 19 encumbrances to be paid in FY 20, support for a Police Recruit Academy, City Manager Strategic Initiatives for FY 20, and release of $8.74 million in Measure A surplus from FY 19 for use in FY 20.
Answer: It's the $3.11 million total cost El Dorado Park West artificial turf soccer field (along Studebaker Rd. between Willow St. and Parks/Rec HQ) advanced to passage despite considerable public opposition by Council incumbent Stacy Mungo. Under Mungo, the project grew from $1.5 million to a total taxpayer project cost of $3.11 million.
How'd that happen? On Feb. 18, 2020, Councilmembers (including Mungo) signaled that they didn't object to allocating $1.5 million for the artificial turf field as part of $4.3 million in Measure A FY19 "surplus" for various items. "Measure A and the promises of Measure A have consistently year after year been fulfilled. The promises that this dais, this board, made were for infrastructure and public safety. And maintaining our parks and libraries are [sic] as important as our streets," Mungo stated at the time.
But internal city records, obtained by LBREPORT.com under the CA Public Record Act, show that by early 2020 city staff realized the $1.5 million sum was as much as $900,000 short, consumed by installing artificial turf fields at Admiral Kidd and Seaside Parks
In a Feb. 11, 2020 email, then-acting City Manager Tom Modica told subordinate staff: "This project goes back several years -- it was originally awarded funding, then that funding was used to fund the other artificial turf fields as they were project ready, and now are back to finding funding to honor that original commitment and complete the project..." Accolrdingly, Mr. Modica added $850,000 to the El Dorado Park field's FY21 budgeted cost, bringing it to $2.35 million.
The 2.35 million cost figure began appearing in City budget documents...
In Sept. 2020, by which time COVID-19 impacts had been visible for months, the City Council voted 9-0 to approve a FY 21 budget that included the $2.35 million cost.
So how did it balloon from $2.35 million to a total project cost of $3.11 million despite COVID=19 budget impacts? Councilwoman Mungo initially tried to deny it, first contending (in materials disseminated by her Council office) that it was a "typo," then fogging the figure by claiming during the Council's final Dec. 8-9 project agenda item that the $3.11 million sum no longer applied because bids received were lower than expected.
Bids received were indeed lower than expected but the Council's voted action also approved spending ALL of the $2.35 million included as the Council's Sept. 2020 FY21 budget item AND triggered spending roughly $760,000 from Public Works sums for a total project cost of $3.11 million ($2.35 million + 0,760 = $3.11), a sum publicly stated in city management's Fiscal Impact Report accompanying the Dec. 8 agenda item.
Disclosure of the $3.11 million sum actually came months earlier in a City published online document (titled Measure A Improvements: Parks & Recreation") listing various projects city management plans to fund using the Measure A ("blank check") sales tax increase...."
At 1:08 a.m. on Dec. 9, 2020 the Council voted 7-1 (motion by Mungo, Supernaw dissenting, Andrews exiting early in his final Council meeting) to approve spending a total project cost of $3.11 million (roughly twice the amount publicly represented 13 months earlier) for the El Dorado Park artificial turf soccer field
The Council majority's choice to spend that $3.11 million sum on the El Dorado Park artificial turf soccer field despite COVID-19 is now reflected in the nearly $20 million "deficit" (spending exceeding available revenue) that city management and LB City Councilmebers now blame on COVID-19.
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