Long Beach’s City Council adopted a $3 billion budget this week, that, according to projections, will result in the city finishing the upcoming fiscal year with a $100,000 general fund surplus.

City government’s new fiscal plan mandates the leaders of several city departments to shave expenses in anticipation of multi-million dollar deficits that may force Long Beach officials to consider tough spending choices in about one year’s time.

“We’re seeing the three-year projections (and) we may have to make some difficult decisions in the years to come,” Councilman Rex Richardson said during Tuesday night’s council meeting.

“We immediately look to the future by finding ways to balance the budget next year.”

The council approved city government’s budget by taking a series of votes Tuesday. The fiscal year begins Oct. 1.

Long Beach’s new budget numbers

Long Beach’s new $3 billion budget calls for $2.6 billion worth of new appropriations, much of which is assigned to city operations – such as Long Beach Airport or the Port of Long Beach – that are not financed by general tax revenues. Roughly $424 million in authorized spending will go to already in-progress projects and grants that city officials can spend over the course of multiple years.

The part of the budget that Long Beachers pay for when they pay their taxes, called the general fund, pays for key city services such as policing, firefighting, parks and libraries. The newly-approved budget calls for more than $501 million in ongoing and one-time dollars to be spent on general expenditures that also include infrastructure expenses.

Among city government’s new spending plans:

• Adding more than $26 million in Measure A-related sales tax dollars to the other money in the city’s capital improvement budget for a total of nearly $96 million worth of infrastructure spending.

• Planned expenditures of Measure A dollars for street and sidewalk projects include $6.9 million for work on arterial streets, $2.7 million for sidewalk curb ramps and $1.8 million for alley improvements.

Beyond streets and sidewalks, City Hall also plans to spend $4 million in Measure A money for a new community center at Houghton Park in North Long Beach and $4.3 million for the city’s fourth consecutive Police Academy class.

• Nearly $453,000 for two firefighter/paramedics and a vehicle for the Fire Department’s Homeless Education and Response Team.

City managers expect to finance this program through Measure MA taxes on marijuana sales, and City Councilwoman Stacy Mungo said the plan represents City Hall’s first effort to incorporate structural funding for the Fire Department’s homeless outreach team into the budget.

All in all, City Hall is projecting to take in about $5.2 million from marijuana taxes during the new fiscal year. By comparison, the Measure A sales tax increase may bring in some $48 million during the same time period.

Future hardships

Although City Hall officials expect to make it through the coming budget year without having to break out the red ink, that’s not the case for the near future.

City budget projections show a $10.4-million deficit for the fiscal year that begins October 2018, and an $8.7-million deficit is possible for the subsequent year. Projected increases in pension and employee compensation costs are expected to be major causes of potential deficits.

That’s why the council also adopted an order calling on city department leaders to figure out future cost savings. Lea Eriksen, the city’s assistant finance director, said the council’s direction requires staffers to figure out savings that don’t sacrifice public services nor city employees, so it’s uncertain as to how much savings may be generated.

She also said that although City Hall typically presents its mid-year budget update to the council and public in March, the city’s finance team plans to beat that schedule in advance of city government’s next budget cycle.

“One of the things we’re committing to doing is providing updates to the City Council earlier this year,” she said.