LB City Council prepares for furloughs and budget cuts in fiscal budget as response to COVID-19

LB+City+Council+prepares+for+furloughs+and+budget+cuts+in+fiscal+budget+as+response+to+COVID-19

Illustration by Emma DiMaggio

At its Tuesday, August 4 meeting, the Long Beach City Council discussed the fiscal budget for 2021 and lowering licensing fees for small businesses.

The proposed budget was presented to the Council by City Manager, Tom Modica, who had previously presented the budget to the public alongside Mayor Robert Garcia on Monday, August 3.

In his comments, Modica stated that Long Beach is looking at a $30 million shortfall, partially due to the City’s response to COVID-19. He noted that the City had spent about $100 million in response to the pandemic.

The City’s responses have included free testing, a shelter for homeless residents, food, rental assistance, financial support for businesses and more.

Additionally, Modica said that City staff are trying to balance the budget while incorporating the City’s new declaration of racism as a public health crisis.

“We’re implementing bold actions and investments in the areas of racial equity and reconciliation, and we realized that this budget is really just a first step,” Modica said.

Due to the shortfall, the proposed budget introduces a “multi-step approach to savings and reductions”.

The steps include:

• New or reallocated revenues
• Strategic Investments
• Efficiencies and Innovations
• Service Reductions

One of the budget proposal options is the use of furloughs as a one-time solution, which would help the City save $11 million.

The furloughs would implement a temporary reduction in work hours for employees and could potentially close City services for one day every two weeks.

The proposal states that this could cause a service impact of about 10 percent, but that it would help avoid layoffs and a more service impact to City services.

The plan also proposes that the City look into service reduction. For example, the elimination of 59 sworn positions across Long Beach, 54 in the Long Beach Police Department and five in the Long Beach Fire Department.

The outline for the plan suggests a reduction for the LBPD in the Vice Detail, the K-9 team, reduced Metro Blue Line officers and the termination of the contract with the Long Beach Unified School District.

The City will also look into eliminating or reducing services such as tree-trimming or landscaping.

Modica stated that cutting back on services would impact an estimated 136 positions, but said that City staff are still working with Civil Service to determine the actual number.

He also stated that out of this number, 77 positions are currently full, but that 59 roles are vacant.

“We will work and do everything we can to try to prevent layoffs for City employees,” Modica said. “We’ve been holding positions vacant in the [event] that we may need them.”

In his comments, Councilmember Al Austin acknowledged that COVID-19 is a significant obstacle for the City, but expressed some worry about the proposed furloughs.

“I’m […] concerned about the furlough impact on many of the lower paid employees who are already struggling to get by,” Austin said. “They work hard and they are probably most at risk during these difficult times.”

The budget also proposes looking for new or reallocated revenue resources. For example, the budget suggests a tax increase of one percent for the business license tax. The tax for medical marijuana will also increase from 6% to 7%, and recreational adult-use cannabis could also increase from 8% to 9%.

The proposal also recommends increased fees for towing and parking lots and an increase in ambulance rates. Another possible source of revenue could be a youth sports registration fee, with waivers for low-income families.

The recommendation also suggests that Long Beach look into strategic investments, such as areas that will improve the City, such as public facilities or utilities.

To view the full budget proposal itself click here.

To view a slideshow regarding the full budget proposal click here.

Fee Suspension
The City Council voted to have the City manager work with other departments to look into the possibility of suspending health, fire and business licensing renewal fees for restaurants.

The plan is meant to provide relief to restaurants that have seen a decline in customers due to the City health order. Under the current guidelines, restaurants are not allowed to have customers in their dining.

The motion was supported by Mayor Robert Garcia, who could not be in attendance due to family issues.

“Restaurants across our city have experienced a sudden loss of income due to the COVID-19 pandemic. Pausing annual fees and charges will help dining locations keep their doors open and ensure our economy is able to recover faster when the State of Emergency is lifted,” Garcia said in a letter to the Council.

The current motion would build on a deferral program that the City already has in place for restaurants. Right now, the City is not collecting fees for licenses until August 30.

In her comments, Councilmember Suzie Price made a friendly motion to have the study look into suspending licensing for all businesses. Under her motion, the suspension of fees would cover businesses such as nail salons or hairdressers.

“I certainly don’t want my friendly [motion] to slow things down for restaurants, but I do believe that all businesses that have been impacted as a result of COVID-19 should be afforded some relief,” Price said. “They should not have to pay fees and taxes when they can’t operate their business.”

The motion was accepted by Councilmember Daryl Supernaw, who was the main supporter of the agenda item.

Councilmember Mary Zendejas also supported the agenda item and offered a friendly amendment asking for a tax rebate for businesses that may have already paid their annual fees, which was accepted.

In the end, the Council passed the agenda item with a 9-0 vote.

View the agenda for the August 11 city council meeting here.

The Long Beach City Council meetings are held every Tuesday, except for the last Tuesday of the month. Council meetings are being hosted through teleconference in council chambers in the Civic Center Plaza, 411. W. Ocean Blvd. The public is allowed to participate through online comments and limited telephonic public comments.