LONG BEACH — The covid-19 pandemic is wreaking havoc on the city of Long Beach’s 2020 budget.

In an update on the impact of expected lost revenue to the city council, Mayor Jerry Phillips said projected revenues in several of the city’s funds were being slashed by at least 20%. Overall, the new projections represent a loss of $1.54 million in revenue for the city.

Long Beach City Administrator David Glasson said the new revenue projections were made in a proactive manner so the city wouldn’t be caught asleep at the wheel when the ramifications of the pandemic begin settling in. With such a fluid situation, he added the city won’t know the true impact on its revenues until later and will continue revising the projections as the situation evolves.

“Does this go on for three weeks, does it go on for three months, or does it go on for three years?” asked Glasson. “We know it’s going to affect us — we don’t know how much yet — and as this drags on we’ll keep revising it and thinking, ‘Now what can we expect?’”

Pull Quote

‘Does this go on for three weeks, does it go on for three months, or does it go on for three years? We know it’s going to affect us — we don’t know how much yet…’

David Glasson

Long Beach city administrator

The general fund is one of the funds seeing a 20% reduction in anticipated revenue. The fund’s main revenue sources includes utility taxes, sales taxes, property taxes and fees from business licenses and building permits

“We don’t expect [property taxes] to change too much, but it could,” said Glasson. “Sales tax, to us, is the big unknown. We’ve shut down tourism, we’ve shut down the motels, there’s no big construction project — those generate sales taxes as well.”

As a result of the anticipated loss in revenues, the city is now not planning to rehire a Long Beach Police Department officer position that became vacant earlier this month. Glasson said the city was planning to rehire for that position prior to the pandemic.

The city fund that is projected to get hit the hardest is the lodging tax fund. Revenues have been reduced by 40%, equating to $300,000 and showing a negative balance of about $75,000. Glasson said the lion’s sharing of lodging taxes, about two-thirds of the overall total, comes in during July, August and September, during the peak of the peninsula’s tourism season.

“I’m hoping we get summer back, as far as that goes,” said Glasson. “Of course, I hope that this all ends tomorrow and everyone’s healthy and can go about their lives, but you’ve got to plan for some of the worst-case scenarios.”

In response to the projected loss in lodging tax dollars, the city notified the Long Beach Peninsula Visitors Bureau that it was reducing their funding to $100,000 for this year. The lodging tax fund also has a sinking fund with a $200,000 balance, but money in that fund is set aside as a match for the boardwalk grant application.

The water receipts in the city’s water fund are being reduced by 20%, which represents about $375,000. In response to the projected lost revenue, large purchases in the fund are now frozen, the water pilot study and aluminum treatment for the city’s reservoir have been postponed and the South Washington Avenue Project has been delayed until 2021.

While the sewer receipts are based on a flat fee and not based on consumption, Glasson said the sewer fund’s revenues were also cut by 20% just to be consistent across the funds, and there is no current mechanism to give a break on sewer charges. Glasson said it is something the city council could consider, but noted he hasn’t had any conversations with councilors about doing that.

“At this point we’re just exploring options, because we do have individuals and businesses saying, ‘Hey, we’re looking for a little relief, if you can help it,’” said Glasson. “We’ve got to look at it, and we’ve got to look at what’s legal.”