Long Beach: Long Path Towards Fiscal Stability

While many cities recently have begun aligning structural expenses to structural revenues, the City of Long Beach has been working towards a ‘sustainable’ financial situation since 2003. Now, nearly a decade into the process, the city can be used as both a modern example and a historical case study.

Largely, the efforts that have been undertaken in the city have been considered a success. But that success has not come without its challenges, and it hasn’t come alone.

And the community was brought in as a partner from the very beginning.

The evolution of the Long Beach community and economy began in the 1990s, when a U.S. Naval Base closed. That base closure resulted in tens of thousands of job losses, and a loss of revenue for a city government that had become dependent upon one-time budget solutions to long-term budget problems. The peak was reached in 2002 when the City Manager introduced a budget with $37 million in ‘one-time’ fixes.

Shortly after an interim city manager was brought in, the sustainability drive began.

The city sent surveys to residents, posted a survey in the Long Beach Press-Telegram and Business Journal. They heard from more than 15,000 residents. Those residents weighed and ranked the importance of 51 city programs and nine service areas. That resulting data was brought forward to a series of meetings with the public, the first of which drew more than 800 members of the community.

Fast forward eight years.

The City has cut more than $144 million from its general fund budgets. It took more than six hundred layoffs, and a community that was willing to wait longer for services. In some cases, residents could even offer to help cover some of the costs to have work done sooner. The city has also increased revenue sources by about $40 million.

They also instituted a reverse of the State’s Proposition 98, of sorts. In Long Beach, the city manager adopted a policy of ‘proportionate share.’ That policy was implemented in 2010 and requires that no more than 70 percent of municipal spending goes towards public safety – which had been on pace to account for 100 percent of spending by 2030.

‘Proportionate Share’ ensures that the city will continue to provide more services than just police and fire protection by ensuring that all departments are subjected to cuts – not just more obscure ones.

In addition to cost savings and revenue-aligning measures, the city has also sought to reform its structure.

For the length of its history, the city had operated under a manager/council structure – with the council being elected by of at-large elections. The mayor was then elected from among the council members. The city has since switched to a district-voting structure, with a directly elected mayor. The mayor was given the power to veto council actions – and even veto line items contained in budgets.

Long Beach has also begun looking beyond itself for ways to deliver services. City officials entered into a public private partnership for a new courthouse. And, working within the constraints of a voter-approved ballot initiative, the city is evaluating proposals to outsource a variety of service including street sweeping and vehicle towing.

The process isn’t complete yet. Despite all these steps taken, Long Beach had to overcome a budget deficit this year of roughly $20 million – although that is about half as large as similarly sized cities.

Final determination of success will likely no be determinable until years from now, however, early indications show that Long Beach has blazed a trail for long-term stability, community satisfaction, and effective service delivery.

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