How Long Beach Weathered the Storm and Restored Its Fiscal Health
Bonnie Lowenthal is vice mayor of Long Beach and can be reached at firstname.lastname@example.org.
- The city council adopted financial policies to establish standards for guiding the city’s budget and financial activities with the intention of preventing future budget imbalances.
- More than 400 positions were eliminated without layoffs.
- More than 250 vehicles were removed from the city’s fleet, lowering fleet services costs and saving $1.25 million.
Materials, supplies and equipment were reduced citywide, saving more than
- Approximately $1.8 million in cost savings and new revenue were generated through stepped up code enforcement.
- The city’s optimized workers’ compensation program has reduced direct costs by $2 million annually citywide ($1.3 million in the general fund) while improving services to injured workers.
- Approximately $13.7 million in revenue was generated from increased cost recovery on fees for service, and $12.2 million was generated through increased return on city assets.
- An operating reserve and infrastructure reserve were created to ease the impact of future economic fluctuations.
- The emergency reserve was maintained at 10 percent of the general fund budget, per city council policy.
- Hours at the city’s 12 libraries, as well as the books and materials budget, were severely reduced.
LESSONS LEARNED FROM THE BUDGET PROCESS
We live in a political world. Recognize the difficulty facing your council. Making incredibly hard decisions, including which city services to keep and which to reduce or eliminate, negotiating employees’ salary and benefits, and changing the way the city does business from the inside out, is a difficult reality for most elected officials. It helps if management can provide a clear direction, a well thought-out, comprehensive plan, and strong leadership before the political urgency dissipates over time.
Does your city really want to hear from the community? Be prepared! Involve the community with every major decision. Make openness and transparency a city priority and policy. Residents are more likely to trust you when you are forthright early in the process about significant problems.
Also have a mechanism in place for analyzing large amounts of community feedback. Long Beach received more than 13,500 responses to its Voice Your Choice community survey and then created a database to accurately analyze all of them before communicating the results to decision-makers.
“We didn’t have a mechanism in place to handle such a large amount of community feedback at the time. Cities need to have that, especially if they’re inviting feedback, because it can be overwhelming,” said David Wodynski, city budget management officer. The database is extremely useful for analyzing community feedback from annual budget summits and community meetings.
Prepare in advance. Results-oriented budgets provide easy-to-understand financial information for the council and the community. Having a performance management framework in place at the beginning of the process is important. The city implemented its performance-based budget under the Focus On Results (FOR) Long Beach banner for FY 2006, two budget years after the start of significant cuts. “If we had the FOR Long Beach information at the beginning of the process, we would have been more efficient. It would have helped us fine-tune our strategies earlier by accurately identifying low- and high-performing programs, especially with the goal of aligning resources with core programs and services,” said Stephen Scott, assistant to the city manager.
Show the results. Demonstrate early and often to council members, employees and the community the tangible steps the city is taking to put its own house in order. Long Beach benefited greatly from launching internal process reviews (optimization studies) and sharing the results with the public. For instance, one optimization study pointed out that several different departments, including city manager, planning and building, police, health and human services, city prosecutor and city attorney, were engaged in code enforcement activities. Several departments are still involved. As a result, the work is consolidated in the Community Development Department, which eliminated duplication of efforts and multiple contacts for the community. Now code enforcement workers are deployed on a geographical basis, which fosters a better relationship with neighborhoods. The cost savings over three years is estimated at $1.8 million.
GETTING THE WORD OUT IN LONG BEACH
The City of Long Beach had no problem getting media coverage during its budget crisis in the fall of 2002. Screaming headlines were criticizing the city’s opaque budget process that contributed to its multimillion-dollar structural deficit.
As city officials embarked on an intensive community outreach initiative to draw residents into the budget process and restore public trust, they worked closely with local media to publish one of the centerpiece efforts: the “Voice Your Choice: Community Survey on City Services,” which asked the community to prioritize 51 general fund programs in nine service areas and solicited revenue-generating and other ideas “for fixing the city’s budget problem.”
The survey, published in English, Spanish and Khmer (the three primary languages in Long Beach) was also mailed with a monthly utility bill to each of the city’s 170,000-plus households, posted online, and distributed to more than 80 boards, commissions, advisory committees, neighborhood associations, business organizations and even high school student councils during budget-related presentations.
The result: 13,500 responses for service priorities and guidelines, as well as a renewed sense of trust, confidence and understanding throughout the budget process.
The city also launched an ongoing series of community events and meetings, including annual budget summits. The city actively used media coverage, fliers, electronic messages and advertising to promote these events. It also distributed press releases about the information, suggestions and updates presented and received in these meetings.
These public meetings provided an opportunity for senior city management and city council members to review and discuss city services face-to-face with the community, as well as collect more comments, feedback and ideas to guide the city council’s budget deliberations.
This major shift in attitude underscores an important point: It’s not enough to hope that people understand what city hall is doing; that can easily lead to misperceptions about the budget process, budget priorities and what residents can expect from city hall in general. City leaders must take the initiative to ensure that residents have ample opportunities to understand and comment on city goals and priorities. And the earlier in the process residents participate, the more likely they are to understand the process, appreciate the complications and contribute to the solutions, which results in increased levels of trust for city officials.
The City of Long Beach also publishes its budget on its website and publicizes budget information through:
Even people who call city hall learn about these budget events from on-hold messages.
In addition, the city solicited ideas from its employees through a Voluntary Idea Program (VIP), which offered a monetary incentive for innovative ideas if the city used them. A total of 361 VIP ideas to reduce spending or increase efficiency were submitted, and many of them were implemented.
The City of Long Beach was not alone in getting the word out. Here’s how the Long Beach Business Journal, which had been a fierce critic of the city’s policies, assessed the new mindset:
A sea change has occurred at Long Beach City Hall. ... Let’s just say they woke up — finally. Business as usual, hopefully, is out the window. No more blank checks. No more rubber stamping of budgets. Everything is under the microscope, from travel expenses to the use of city vehicles to salaries to the use of consultants. And that is precisely the way it should always be.
Given the deteriorating relationship between the city and the local media, this newfound mutual collaboration was acknowledged as a breakthrough toward restoring public trust and credibility.
About the Healthy & Safe Cities Series
The League’s focus for 2006 is “To support policies that directly promote the development and redevelopment of healthy and safe cities.” A healthy and safe city is one that can maintain its infrastructure, meet its growing housing needs and help its families thrive. Western City is featuring a series of articles that presents information of importance to healthy and safe cities. To read earlier installments, visit www.westerncity.com/articles.