Recommendation to hold a study session to receive and file a presentation on the City’s Fiscal Outlook.
Right. Thank you. We're going to transition now in just a few seconds to our budget hearing, which. We'll be next. So. Mr. Modica, just get that prep and we'll start in just 30 seconds. And Mr. Murdoch, are you guys ready to go? We are ready to go. Out and have a quick read. Read the study session item. Recommendation to hold a study session to receive and file a presentation on the city's fiscal outlook. Great. Think I'm going to make some opening comments and then turn this over to Mr. Modica for the presentation. I know we have a lengthy budget presentation. It's a very important presentation. I think we're all aware that we have some significant budget challenges here, both in the near future and in the years ahead. Budgeting was already going to be difficult. As we all know, with COVID 19, it becomes a major economic challenge for us as a community. I've been sharing with folks that just as well as small businesses and others are struggling and there and they're really struggling, including workers, that also impacts the city and our ability to to fully function with all the services that residents and our residents expect becomes much more difficult. And so this will be a difficult budget process. It's going to require all of us to come together and focus on those core services and the core functions of a city. All it's going to make and force us to make some difficult decisions and prioritize. And so that's something that will begin. We'll have this presentation tonight. And of course, we know that we have a robust process that will start later this summer with our our budget oversight committee, with the recommendations that I'll make to the council. And, of course, the deliberation of the council will go into as they go into the fall. I want to want to also note that this is a moment of shared sacrifice for the city. I expect, and I believe every member of our organization will be making sacrifices and will be stepping up to to to take this on . And so I think we're all ready and prepared to do that, including all of us. I know. And so we're going to have to push ourselves harder than ever before to get past this economic crisis. And it's one that's not just the city of Long Beach's challenge, but certainly the state of California is facing an enormous deficit as our sister cities all across the state of California. Let me also just finally note that you're going to hear a presentation tonight of what we have in front of us today. And obviously, there has there have been conversations about the governor's proposal to provide additional funding for Long Beach or there's been conversations about the county and possibly reaching out and getting support there or even at the federal level. And while all of those are very are our options and certainly some are very promising and none of those have yet been adopted or even the governor's proposal has to be passed and adopted by the legislature in the month or so ahead. And so I think what you going to hear from staff tonight is where this budget is as of today and not incorporating what may be possible in the future. Rightly so, we're going to hear a budget budget as it is today. And if those dollars materialize from the state, which we're you know, we're optimistic they will or from other places, then obviously these projections will change as we go into the summer. But but we should expect tough decisions regardless. And so with that, I want to thank the staff for their incredible work. And I want to turn this over to Mr. Modica to start this budget process. Thank you, Mr. Mayor. I think that was a very good introduction of kind of where we are and also what the future might hold for us. So the mayor is absolutely right. We are required and responsible for putting together a budget with what we can control. And that really is kind of the process at hand. We are very hopeful if there is additional, you know, revenue or if things change, we will be flexible and will be able to incorporate some of that. But as of today, we're required to put in place and start the process for how we are going to solve this here locally. And so we do have an in-depth presentation for you tonight. We're going to talk about first the financial strength of the city. We're going to talk about the impact of COVID 19 pandemic on our economy and our services. Grace Yoon, our budget officer But your manager is going to give us a projection update and talk a little bit about the budget process. And then I'd like to share with you kind of my goals and strategies for budget balancing. We're not asking tonight for the Council to make any decisions on the budget. This is really for us to present where we are, kind of the approach the city manager is going to take. And then, of course, to listen and be and be mindful of some of the thoughts that the council has. So in terms of financial strength, one, every single year we balance our budget. We do that. It is a key to good financial management. We maintain our bond rating. We've been in difficult times before and we've gotten through every single one. So we do have experience with this every year. We deliver to you a balanced budget and every year the council is physically disciplined and structurally balances the budget. In terms of our reserves, we get asked a lot. We have a general fund reserve, an operating reserve of 13 and a half million dollars, which is about two and a half percent, which is within our our policy. And then we have an emergency reserve, which is four and $5.5 million or eight and a half percent. That is roughly about one month of operating payroll. Emergency reserves are really there for a catastrophe. We are certainly the closest, I think, that we have been in a long time for having a major, major issue that a reserve would qualify for. But we also need to remember there's the potential for an earthquake or something else that could come up. And so we think of those things when we think about our reserves, particularly our emergency reserve. We have other reserves, including unfunded liabilities, capital and one time projects. We also maintain our AA credit rating. It's a very strong credit rating. We do have a large and diverse tax base. So some cities have seen very large impacts and deep impacts on certain things like, you know, sales in TOT. We have experienced those as well, but we do have a diversified base. It's not the only thing we require to fund our city. Prior to the pandemic, our economy was doing very well and we had very strong development activity and we remain to be a full service city. So we are in control of those services. And so what we're seeing with this pandemic really is severe and it's unprecedented. We have never experienced anything like this in our lifetime. We have businesses that are shut down. We have unemployment skyrocketing, some of the highest that we have ever seen, including the Great Recession. The revenue decline was incredibly sharp and quick, and we are also at the same time experiencing increases in our expenditures to deal with the pandemic. And we are doing everything we can to get federal reimbursement. But the exact level of reimbursement is not certain, and it won't be 100%. We also have an uncertain economy. We don't know when the economy is going to get turned back on, when we can restart, and also whether or not we're going to be in another cycle in a couple of months if there's a downturn or if the virus resurges. And so we also do not believe a quick rebound is considered likely. That was the hope a couple of months ago. It would be what we call a V rebound. It would go down quickly and up quickly. Most economists are looking at what they call the swoosh recovery. If you think of a Nike swoosh that it is, it goes down sharply and then it slowly graduate, gradually goes back up. We also have a lack of one time funding that we are not expecting those large one times to come in. You know, if, you know, our bond rating could be at risk depending on what the level of the impact, how long it goes, and our reserves are at risk. And of course, we do expect, like every other city, our services to be impacted. So do you want to recognize that we are not alone in this? We've all been reading the reports of all the cities in California and across the nation that are struggling with financial issues due to COVID one, where one area that we are unique is that most cities there is 488 cities. In California, I believe 484 are on a July one fiscal year. And there's about four cities that are on the federal fiscal year. And Long Beach is one of them. So we're a little we have a little bit more time to digest what other cities are doing and to prepare for our federal fiscal year, which is October one. So I'm not going to read all of these. But to give you a sense of what's going on in the other cities in L.A., they have a $231 million revenue loss. They're using special and reserve funds. They're proposing 26 furlough days and they're doing some significant reductions, including 20% reduction in street sweeping. San Diego has over $300 million. They're looking at 10% reduction in services, eliminating 342 positions, including some sworn library and parks positions. Santa monica has been one of the most dire impacts that we've seen for the size of their budget 48 million in their current year, 102 million and F 21 for a total of around 225 million over the next couple of years. They've taken on significant reductions. 330 7f2 years. They've reduced pay in their management and others. They looked at street sweeping and going from weekly to monthly. San Jose or San Francisco has seen huge cutbacks in clout, including pushing their whole budget timeline back two months. Oakland has done hiring freeze and laid off employees. Sacramento has a $30 million revenue loss and they're looking at kind of their tax measure that they had passed as part of the assistance. San Jose has a huge loss in the current year and 65 million in the next year and as furloughed more than a thousand of its employees. And so, as with many other cities, our revenue losses really are too large to absorb. It's not something we can just manage in-house. We know that both our staffing levels and our services will be impacted, and so we do need to take action to minimize those impacts. The mayor mentioned this, that there are some federal resources out there, but the city of Long Beach did not receive the large City Cares Act funding. You needed to be 500,000 a population or more. We are at about 484, 85. And so a city, for example, that was just on the other side of that 500,000 received $89 million and we did not. So that has been a huge priority of our mayor and our council is to request those dollars. And there is now $450 million allocation in the state budget, and we believe Long Beach is going to get a portion of that. And so it could fund things like certain expenses. It's not completely open to anything in everything. It's really COVID related, but that is an opportunity for us. There's also a federal legislation that could put more than $1,000,000,000,000 into helping state and local governments with their revenue losses. And that has passed the House, but not yet the Senate. And of course, we're still talking to looking at grants and in talking to the county as we are a health jurisdiction and they are receiving funding for health jurisdictions. And so the pandemic has really created this significant financial crisis. And we are going to be looking at ways, two different ways of delivering service, transforming the way that we work, providing services to our residents. We've already rapidly and effectively adapted our organization, and so we have done a lot more online. It is it required us to innovate, to go faster, to offer services we never thought were possible online, are being offered online. And so moving forward, we're going to have to really continue that work to imagine how we could do things differently and also look strategically as look at those in technology investments, invest in innovation, make investment into businesses and revenue sources, and also look at our organizational structure. So I'm going to turn it to Grace Young right now to go through what the numbers look like for Long Beach and some of the budget details. And then I'll conclude with kind of our approach on how we're going to address this. Grace. All right. Thank you, Tom. Good evening, Mayor, and members of the City Council. In the next few slides, I will be going over the updated projections for the General Fund and select other funds that have significant losses and other concerns. These are the Tidelands, ESP, measuring and airport funds. Before we turn it back over to Tom to discuss budget development strategies and approach, these projections that we've made, as we've mentioned earlier, are preliminary and will be updated throughout the budget process and may have significant changes. They are potentially more likely to get worse than better, but we will keep assessing the information as it becomes available. So as Tom mentioned, Long Beach has responded swiftly and effectively to mitigate the threat of the pandemic. And the city has taken a number of direct actions to assist our residents and businesses. Some of these actions have adversely impacted revenues or expenditures. In this slide provides examples of our responses as well as a rough estimate of potential fiscal impact. Our main response to address the health crisis may potentially have a net cost of 3 to 6 million in the general fund and potentially another 3 to 5 million in the health fund, with costs likely continuing past the end of the fiscal year. We roughly estimate a loss of about 2.3 million in both parking citations and towing revenues with the higher revenue loss if street sweeping citation program is not maintained. Gas and water have lost about 700,000 and fee waivers and the no shot off provision and the general fund has lost about 170,000 and business license penalties with much larger losses. If continued beyond today, the revenue losses from people not paying at all are not included and cannot be estimated at this time. The city has also allowed rent payments to be deferred. The city normally receives about 2.4 million a month in rent. The monthly totals are large. So to the extent these payments are never made, which is not projectable at this time, there will be an adverse impact. And so we'll continue to evaluate these things and take them into consideration as we address our budget shortfalls. Turning to the general fund with the stay at home order and all the closures and cancelation. The projected shortfall in FY 20 has gotten significantly worse. Sales tax non measure is projecting a loss of up to 12 million or a 17% decline. From our pre-pandemic projections, TOT is reflecting a $10 million loss or a 43% decline from pre-pandemic projections. Oil has experienced an unprecedented drop in prices, even going negative at one point. Currently, it is trending around the mid-twenties in terms of price per barrel, and our budget is at $55 per barrel. We're projecting a 3 million loss at this time or a 30% decline from our previous projections. But we are mitigating some of this by not funding future abandonment cost, which passes the risk and costs to future generations . Parking citation revenues is estimated at a loss of 2 million, which is an 11% decline from previous projections. And there are also pandemic related expenses, which have been about 11 million to date and for the general fund. And as mentioned before, we are currently estimating about 3 to 6 million total costs that won't be reimbursed. But again, this is a very fluid number and we will need to continue to update this. And we're also continuing to look at other revenues that may be adversely impacted and will include that information in future projection updates. For FY 21. The projections have also gotten significantly worse with the assumption update of a slower recovery as opposed to the much quicker rebound that was assumed at the early stages of the pandemic. Sales tax non measure is projecting a loss of up to 6 million or a 9% decline from previous projections. Totters at 8 million loss or a 36% decline. And for oil, we're projecting 5 million loss or a 55% decline from previous projections, which was assuming, again, that $55 a barrel. And our assumptions now is budgeting at $30 a barrel. But again, similar to FY20, we are mitigating some of this oil loss by not funding future abandonment costs. And we'll continue to review and update these projections throughout the budget process as we get more information. So here is the general fund budget forecast. We are showing a shortfall in FY 20 ranging from 25 to 41 million. This range here represents a high and low scenario based on the level of severity, what the level of severity might be in terms of revenue losses. There's still great uncertainty as to how the economy will react for the remainder of the fiscal year, and limited actual data is available right now. In Fy21 we are showing an updated shortfall of 30 million and the out years are showing shortfalls as well. In general, we are assuming that revenue losses continue through FY 21 but start showing improvements and then more or less recover by fy22. We're not assuming a second phase of COVID 19 or another general recession. These numbers also include the cost for negotiated contracts and an assumption of a cost of living increases for other groups. There's also higher CalPERS costs beginning in FY 22 due to the expected investment loss that we are anticipating in FY 20. And bottom line is that these large these are large shortfalls and indicate a need for a long term plan and substantive corrective actions. The Thailand's operating fund is also facing fiscal challenges. This is the fund that supports operations and programs of beaches and waterways, the Convention Center and capital projects and the Tidelands area. For FY 20, we're anticipating to end the year with a negative of funds available of 5 million. Assuming no corrective actions, if we continue to make no changes, the negative funds available grows to about 19 million by the end of FY 21. The assumptions we are making here regarding oil prices is $30 a barrel in FY 20 for the rest of the year. $35 in FY 21. $45 in FY 22. And then back up to our current budgeted 55 in FY 24. There are also extra costs for bonds we are anticipating to hit in FY 21 due to the aquarium and Queen Mary shortfalls, as well as to mitigate the convention center loss per the contract. We're also assuming that for FY 20 and 21, as I've mentioned before, we would not be funding the annual oil well abandonment costs. So for the shortfalls in FY 20, in FY 21, the budget process will be looking to address this with a combination of project funding, savings from operational reductions and the use of reserves. Any projects slated for deferral or cancelation will be brought before council before any action is taken. The SAP fund or the special advertising and promotion fund is also severely impacted as total revenues, which is a very sensitive and volatile revenue source, is its main source of funding. And the SAP fund supports advertising, promotional and public relations projects and special events that call positive attention to the city. For FY 20, we are projecting and ending funds available of -700,000. Again, assuming no corrective actions, this is dropping from the 5 million in funds available at the beginning of the year. If we continue to make no changes, the negative funds available grows to about 2.6 million by the end of FY 21. The extra 1% tax that is effective in July is not included in these numbers as it is dedicated per resolution for specific purposes and again, similar to timelines for the shortfalls in FY 20 and 21. The budget process will be looking to address this with a combination of project funding, savings from operational reductions and the use of reserves. And again, any project cancelation will be brought to City Council first for review. Measure is also taking a significant revenue hit compared to pre-pandemic projections. However, the impact of this is somewhat mitigated because the FY 20 adopted plan was based on a lower budgeted revenue projection as the plan was finalized prior to seeing the strong F1 19 year end performance in FY 20. Compared to our budgeted measure plan, the loss is 5 million, and for FY 21, we are projecting to be below the anticipated revenue in the plan by 2 million. After this, however, we are expecting that revenues will be at or better than the projected revenue levels assumed in the FY 20 budget plan due to the long term revenue increase from the approved ballot measure. This additional revenue from the ballot measure has not been programed yet and will be up to City Council. How to allocate that in the future. As part of the 521 budget development process, a revised spending plan will be proposed that takes into account the revenue declines in FY 20 and 21 , the difficulty in funding public safety operations, as well as the long term revenue increase from the approved ballot measure. We do anticipate that we will need to potentially postpone some projects depending on cash flow with the revenues and also potential reallocation of revenues to help maintain public safety services. Again, any changes or updates to the measure plan will be reviewed with City Council. Lastly, the airport fund has also experienced an unprecedented drop in traffic and flights, potentially resulting in a loss of up to 20 million in Fy20. Uncertainty around when the airport will resume normal operations and how the airlines will adapt to the pandemic make it impossible to have reliable projections for the future at this time. The key immediate goal is ensuring that there is adequate cash for operations in the city's practice of maintaining a large funds available for the airport fund has made a huge difference, and the 18 million CARES grant funds that. Were awarded will also. Help greatly, and the airport is anticipating on expanding these funds over the next six months. The airport is currently reviewing options to reduce operating costs, and the Terminal Area Improvement Project is being done in phases with exit ramps for each phase in order to protect cash as necessary. Moving forward, we will be carefully monitoring adaptations by airlines and passengers, as that will affect and impact airport's future and fiscal health. There are other funds and operations that are impacted by the pandemic, including other enterprise funds. For example, we expect mobility and other state county funding from gas tax to be adversely impacted. Utility fund revenues, including penalty fees, are likely down. Towing fund revenues are down significantly due to reduced tows and cancelation of lead sales. All of these impacts have not fully been analyzed yet, and so we will continue to evaluate and update counsel in the future. And as part of the budget process, all funds will be asked to evaluate the health of the fund and to find efficiencies. So with this presentation, we are restarting the FY 21 budget development process that had been temporarily suspended for about two months as the city worked to respond to the pandemic. Our goal is to meet the normal adoption date and the intent is to give the city council and the public close to the normal time they typically have for review and for the budget hearings and public discussion. In order to achieve this goal, we will need to implement a modified process that has shortened timeframes, different deliverables and less time for in-depth analysis. We will be submitting to the Mayor and City Council a booklet summarizing the key proposed changes, as well as the mayor's budget recommendations in lieu of a full proposed budget book in order to meet the time frame goals. The goal is to provide the core information needed for discussion and decision making. The full adopted book will still be prepared and published after the budget is adopted in September. And lastly, during the Flight 21 year, strategies will be developed for future year shortfalls. And with that, I will turn it back over to city manager Tom Mordecai to discuss the goals and strategy for budget balancing. Okay. Thank you. Thank you very much, Chris. So first and foremost, we're going to do what we need to do to protect public health. And so we do not expect an impact on COVID 19 pandemic. We're going to continue to do all the great work that our team is doing, that our community is doing to to help people through this and to preserve public health. That said, we are already reducing non-critical expenditures as much as practical. We will look at the strategic use of the operating emergency reserves, but also making sure that we preserve reserves for the future. Any use of reserves would come to the council before they would be be spent. We are not anticipating layoffs of full time staff in 20, but we are likely going to have to follow what other cities have done and reduce some of the part time staffing hours where there is not budget or work for those employees. We will be minimizing layoffs by utilizing attrition, holding open a bunch of positions. And we've had experience doing this in the past. We were able to hold positions to get vacancies and also for places for people to move into in the event of position reductions in the future. We will propose a balanced or we will balance propose a balanced budget. We're going to be emphasizing core services and maintaining a balance of services. And you'll hear me talk about that later tonight. We're going to keep looking for transformational opportunities, looking at how we can do things differently. And then we're also going to have to make investments in our economic future. And so for the F 20 budget strategies, we have put in a hard hiring freeze. There are exceptions, of course, to specific positions, but every every position is being scrutinized on whether we should hire and we're cutting back those nonessential expenditures. We will provide recommendations later to the Council on defunding some of those non-critical capital projects as something to consider to close the year in balance. We see that as one of the last things that you would have to do, but it is something that we are working on. We would reconsider our summer activities and programs impacted by the pandemic. We know that kids are going to need a place to go in the summer, but also what can be safely opened and how do we look at those differently? We're going to emphasize full time staffing over part time or non-career staffing. I do believe we should defer our decisions on our police and fire academies for a little bit until we get a better picture of what is going on with our FY 21 budget. I'm not saying we should cancel those and not do any academies in the future, but that we have to make decisions right now about hiring people in the next month or two, and that we would defer that for a little bit and we would continue to in encourage innovation and investment opportunities. And so we see a four pronged strategic approach to the general fund reductions. First, we would look to new or reallocated revenue. We through this would be looking at our fees, would be looking at ambulance fees for public safety, for example. We're going to be looking at how measure aid can be appropriately used for our public safety. As that's one of the eligible uses, we would explore additional efficiencies, innovations and strategic investments. You know, how do we do things differently looking at everything from management consolidations to our functions to our various bureaus and divisions? How do we use that different technology? How do we come back as an economy? I'm also letting you know and letting our employees know and I'll be communicating this tomorrow that we're going to be asking for assistance and contributions from our employee groups. I had a chance to talk to them all today and and let them know that that is something that we're going to be bringing up appropriately at the bargaining table. So that is something that we are going to engage in discussions we got. I think our employees understand and know that we are in some very difficult times. And so I was encouraged by all the discussions I had today. And finally, we're going to be looking at service reductions that prioritize the city's core services and values and do an outcomes based decision making process. And so this is really the core of the presentation. Mayor and Council, I want to talk to you about something we're calling a balanced outcomes based approach. And so we know we have critical services. We need to meet our local, state and federal mandates and legal requirements. We have to have a core of a system in place to support all of our frontline systems and services. And so we need to keep that in a functioning capacity. And then we have the core services that our community relies on. And so we're going to have to prioritize and balance all of those core services and really look at what we are going to consider reasonable response and service levels. And so this is not an exhaustive list, but this is what I hear from you as the council, from our community. Our core services are things like police patrol, emergency medical and fire services. Our infrastructure response like potholes, sidewalks and facilities maintenance. Our maintenance of our public assets are spaces. These are things like code enforcement, graffiti, landscaping, tree trimming, our response to homelessness, our maintaining and enhancing our revenues, our quality of life services, which is a huge long list, but. Could include library and recreation and community programing and support for our youth and senior populations. And so how do we achieve that balance? We need to have a couple of outcomes that we're focused on structurally balance the budget, preserve that capacity as an organization so that we can effectively operate and provide the services our community wants and needs and then retain those acceptable service levels. And so what steps are we going to take? We're going to look back over the past five years and review the additions that we've made to the budget and look to see are those still in keeping with our priorities and those core services. We're going to reevaluate what is an acceptable service level. If we made a reduction in that in that core service, is that something that we can live with if it's a 48 hour response time or a 72 or we're going to look at technology in other ways we've serve the public. I do believe we should look at the entire organization and look really at outcomes rather than, you know, a percentage in a percent there. We're going to look at our service delivery changes from a whole city perspective, but also through an equity lens. How are we serving all of our residents? But also what it or how does equity play a role in this? And how do we know what the impact of those reductions would be through an equity lens? We're going to also pursue in cost recovery. We need to look at services differently and we need to think about how we can operate. And I think the COVID experiences has opened our eyes to different ways to operate. And I think we need to recognize as a community that service reductions will occur and we're going to have to adapt our approach and expectations. And so why a balanced approach or if we over concentrated our service reductions in one area in particular? I do believe we have so little services left that all of them are considered essential. We've been through the Great Recession. We no longer do things that we used to do back then, but now we really are in that area where things are all important. If we exempt certain areas and say we're not going to touch that or touch that or even consider it, that leads really do a fractured service approach. Everything should be on the table as we look at this and then we create options and then look to see what the what the alternatives are and what the outcomes are and especially balance because our services are linked. And so we we talk about the public safety continuum and public safety relies on libraries and parks are poor infrastructure and our maintenance can impact our police and fire. Homelessness can impact police and fire. And support for our frontline workers are critical to their effective operation. If we can't support them in the field, they're not going to be effective. And so you've seen this graphic before where we really look at all the different pieces of the puzzle that we do and how they're all interconnected. And so that really is the concept behind the balanced approach. And so I do want to I'm almost done, but I do want to end that finding $30 million next year in the F 20 budget is going to be very, very difficult. And so we're going to have to look at everything. And I'm just giving you an example of of our budget. So police is 250,000,048%. You can see all the percents. And just to put that in perspective, you know, ten officers is about two and a half or $2 million. A fire engine is $3 million. Tree trimming is $3 million. Parks vacancies, 450,000. And library, a medium sized library is 500,000. Those are by no means what we're proposing, and those are examples only. But just to give you a sense of scale. 30 million out of this budget is going to be difficult. And so we are looking at options. And so we are going to be asking all departments to participate. And my philosophy is we're going to put together something that we believe is a budget, but then we're also going to show you what some of the alternatives would be. So when you have to make those tough decisions in the budget, you can see why there's other alternatives and kind of how staff got to those those recommendations. We're going to ask for targets above what we need so that we have that flexibility and options. And we're asking all departments to submit reductions, including non city manager. Non public safety will be in a range of 0 to 12% of their budget in order to provide those options. And public safety will be in a range of 0 to 3 and a half percent to be able to really look at different ideas. The final recommendations are going to be balanced or based on that balanced outcomes approach, and we're going to keep updating our projections through this budget development process. I'm hoping they'll get better. It's a possibility that they get worse. And so finally to wrap up is we have since the pandemic, has substantially changed our financial landscape. I've said this a couple of times, but we we do know that significant service reductions are going to be needed and that we really need to maintain our core services and values. And also ask ourselves, what are those through this budget process? You know, we we will do this. We will do it right. It's going to be tough. But this team is up for the challenge to present you with those recommendations. And this council makes very good, deliberative decisions during the tough times. And I believe that I believe very strongly that that's going to continue. And so we do hope that all the work that we've done in our economy has really built a good foundation and will be able to recover quickly. And I will just end with saying we will get through this and we will come out on the other side a better organization. So with that, I know that was a long presentation, but we stand ready to answer your questions. Thank you, Mr. Modica, and just really excellent presentation, obviously sobering information, but you and the team have just done a great job of putting that together, so we appreciate that. I do have a speakers list queued up count. Sorry, ringing. ex-Mayor. Well, this is the last time that you put this in in a readable format so that we can get it. You sound a little bit far. If you look at my little town, I guess. Is that better? A little bit. Okay. Let me do this then. How about that? Okay, that's better. Okay. So, anyway, this is a lot to absorb and I'm glad that it's in this format so that we can study it more, more carefully and come up with some recommendations. What interested me in this stood out to me, obviously, is how we are going to work with our enterprises. Twain obviously stood out to me. It's a it's an enterprise business that we conduct. And there was a there's a stoppage of sales at this time. Leigh Sales obviously is 50% of that total operation and being that tween is down, I can see why we don't have that many cars on to sell. But it's still an enterprise and I think we should still try to maintain the strength of our enterprise as much as we can. And if that enterprise is going to be cut back or or at least minimized to a certain extent, what does that mean? That we're also looking at layoffs in in enterprise departments? So Councilmember, one of the unique things about COVID is it has affected everything. So we have seen in all of our funds, we're seeing, you know, different things that we haven't seen before. Towing has historically been a fund that has been able to support the general fund. And so when we look at this, we're going to be looking at every fund, you know, some funds. You know, they're going to have different ways that they contribute to the to the issue and to the general fund. And so we're going to take a look at a fund by fund basis. And towing is one that we're going to keep a very close eye on. But you're right there. There have been impacts in there because we're not towing cars anymore. And that fund is now also not bringing in some of the revenue that it had brought in before. Well, we've got to be. I guess that would also impact what we do with street sweeping and ticketing as well. I would take it because I know some some of the pounds come from students. We have vehicles that are out there abandoned or have five or more tickets which make them eligible for towing and eventually being able to sell them and pick them up. Just out of curiosity. I if I recall correctly, the the toy yard can hold up to about 1500 cars, you know, exactly right now where we're at with that. But the inventory of vehicles are. We are. This is John GROSS. We are not at capacity. We're a little fuller than you might expect. I think we are in the 800 900 level, but I don't confirm that and send you a note if that is a is an error there. And we did resume much of our towing operations this Monday. So we're we're hopefully going to mitigate the revenue losses while still being very responsive to the COVID situation. Okay. That's all I have for now. Thank you. Thank you, Councilmember. Next up is Councilwoman Price. Councilwoman Pryce. Not a recent. Survey. Now we can go ahead. Okay. Thank you. So thank you very much for that presentation. And I really, really appreciate. Tom, that you have shared with us. You know, so honestly, what is happening and what we can expect in the future, I think it's really important for us to have these honest conversations. And I agree with you that I believe that my colleagues and I will be very deliberate and will be very thoughtful in the decisions that have to be made. And I think we are all ready for that time. But we're hopeful that you have some more time to evaluate your options in terms of, you know, where we can tighten our belts, what projects we can defer, and that you will come to us really when when those tough decisions have to be made. And all creative approaches to preserving jobs and services have been exhausted. So I'm really hopeful that we can preserve as many jobs. I mean, to me, that's the number one goal, is to do everything that we can to preserve jobs in the city, because those jobs translate to services and they translate to quality services in every single department. And I know that's all of our goals. So to the extent I mean, I know I speak for myself, I'm not speaking for the whole body on this since I'm the second person queued up and I know others yet have had a chance to speak. So I'm curious to hear what everyone thinks. But speaking for myself, I think, you know, looking at projects that we already have in the queue, infrastructure projects or capital projects that we already have in the queue, perhaps those take priority over new projects. If we haven't started a capital improvement project or it's not in the works yet, it hasn't gone through the air, hasn't gone through. Planning and permitting those kinds of things. Then maybe those are those are projects that take a back burner and projects that are underway maybe take more of a priority. I love the idea of taking a look five years back to determine what new programs to do we fund during that time. And are those truly essential? You know, I'm I'm a lawyer. And one of the one of the gifts that that you develop over time, especially as a trial lawyer, is advocacy. And so when we talk about, you know, what is an essential service or what is a core function of the city, you know, obviously, the best debaters of the world will be able to take either position and argue their hearts out. But I'll tell you right now, when we're looking at the governor's orders and we're thinking about things like, what is it, a central business as a small business owner, I certainly could make an argument to you all day long that the business that my husband and I run is an essential business because it goes to mental health , it goes to progress, it goes to personal worth, it goes to all these things. But in reality, I know what the term essential service or essential business means, and that would be a disingenuous argument. So moving forward, I want us to hopefully get on the same real page about what is an essential core service of the city , and how can we make sure that we preserve those so that we do have equity in the city in terms of every resident being able to benefit from that service that we provide. And so I'm hopeful that we can look at the past five years, think about everything that we've funded, and then think about what services do we have that every resident in this city, regardless of their zip code, relies upon and needs? And how do we make sure that we continue those? So I look forward to that. I do have a question regarding the shelf shortfalls, and I guess this question is for grace regarding the show shortfalls, does that include all the previous shortfall numbers that we had anticipated, which would have included our CalPERS liabilities as well as our contract negotiations? I think it does. I think I heard you say that that includes everything. But is that true? Are these COVID related shortfalls only? Council member. Thank you for the question. You are correct and that these are revised shortfalls that are inclusive of everything. The previous projections and that included some CalPERS or other shortfalls are included in these numbers. Okay. Great. And then the other question I had is that you're not assuming another recession. Why is that? Is that because there's a likelihood that there won't be another recession? Or is it just an assumption that you're making for the purposes of these calculations? Council Member That is an assumption we are making for this particular presentation. We are providing a best estimate of what we think the projection numbers will be in the current and out years. But we are planning to do a better and worse case scenario in the next round of analysis. That includes a potential recession scenario as well as a scenario of what the scenario, what the situation might be if things turn around and look better. And based on those better or worse case scenarios, we will be also developing some contingency planning. Okay. And then I guess thank you for that. And I guess my final question would be really to the city manager, given the fact that we're experiencing major shortfalls in Tidelands, if we continue to leverage the Tidelands Fund or utilize Tidelands monies in order to respond to COVID related scenarios that might impact that fund, will that or could that have an impact on our ability to pay employees that are funded out of the Tidelands Fund? So, Councilmember, this is Grace. I can address that. So what we are projecting right now is a shortfall to the bottom line, tidelands funds available number. But we are planning to address that with looking at projects, looking at the reserves that we have and also making some operational reductions in the future to have a stronger fund moving forward. We would be adjusting things so that we are making sure we make our payroll in the current year and that there is enough cash to do that and funding balance to do that. And so that is not something we're concerned about in terms of being able to pay our employees, but moving forward and looking at the health of the fund. There may be reductions, strategic reductions that need to be made through the budget process, but that would be done and evaluated as part of the budget process. Okay. Thank you very much. I appreciate that. With that, I'm going to turn it over to my colleagues and I'm sure everyone has thoughts to share on this. Thank you very much to the entire staff for your presentation. Thank you. Next up, I have Councilwoman Mungo. Thank you. I really appreciate the presentation. I do have a couple of questions before I make any additional comments. I want to thank all the staff for all their hard work. Of the 11 million year to date spend on COVID from the general fund. What are those expenses really? Or is that our test kits? Is that our homeless shelter set up? Is that what? Councilmember. Majority of these costs are labor related. And so they point to the people that have been standing up, the EEOC, the IMT, as well as other departments that have responded to address the response. Some of these are their budgeted normal salaries and some are overtime expenses. There have been some non. Salary. Or non-Labor costs that have hit. Right now these are being coded as COVID. We're not sure if they will be reimbursed, but they may be things like setting up our telecommuting or other expenses. Are there purchases that needed to have been purchased in response as well as the response to the health? Addressing the health issues with the homelessness and other expenses, material expenses that have been expended by the EOC and the IMT. And testing would certainly also be one of those expenses. So you're having an item before you tonight, about to $2.4 million for testing. So we are hoping to get reimbursed for 75% of everything we do, but we are going to have some unreimbursed expenses as well. So just so I'm clear if our annual. Let's do a monthly. If our monthly payroll expenses were $10 million and 2 million of those full time salaried employees were transitioned over to COVID, wouldn't our face expense drop? And then the 2 million would be reimbursed at 70, potentially reimbursed at 75%. And so our actual. Costs would have been reduced. So for the most. Part, supplement would be the overtime. Sorry. So for the most part, FEMA is not going to reimburse typical salaries of a budgeted employee, even though they're doing COVID rather than what they were doing before. They're looking for extraordinary expenses, things that are above and beyond. That said, some of the federal dollars that, you know, we've been asking for could fund some of those expenses because we certainly have people now doing things that are not what they were budgeted for. They're doing all COVID all day long. So, you know, that's going to be part of the nuance in the next couple of months as we figure out state money comes in and others what is going to be eligible and what is not. So a lot of sense. I appreciate that answer. Secondarily, what is our monthly rate of spend on COVID on a go forward basis? Right now, I can say that all together the courses have been coded to COVID is about 18 million or about 18.5 million. All funds with 11.3 being in the general fund and 7.2 being in other funds. And that represents expenses from the beginning of the pandemic to about mid-May. It is difficult. I mean, so we can extrapolate that and say what the monthly cost has been. It's been about two, two and a half months, but it's hard to say that that value will be our monthly spend because these costs that have incurred so far represent a different level of spending over different times. There was a a lot of cost to stand up the EOC and the IMT, and then those staffing levels have changed. And moving forward, there will be different expenses that we were anticipating with testing, addressing homelessness issues. And so right now it is very difficult to say what the regular monthly costs will be. But we have a team that's looking at this weekly and we'll be evaluating that. And as Tom mentioned, also looking at which of these costs will be able to be reimbursed by grants. And we'll be looking at that and providing updates to council in separate communications about these costs. So just for some perspective, you said it's been two and a half months, 18 million, so almost 6 million a month, something to think about as a as a group as we go forward. Mr. MODICA, you you'd mentioned that we would look at what has been added to the budget in the last five years. I know that as a budget oversight committee last year we did discuss anything that had been added in the prior five years. If we did that list plus this year, it would be the six years since we a majority of the council turned over in 2014. I would just ask that while we have done that and that list is available, we might want to reach deeper back because the priorities of the prior council, all of which except for two are gone, may not be the priorities of today. And so I appreciated your line about just reassessing the organization as a whole, not necessarily where it came from or what year it was added, and just really talking about what makes sense. Does it make sense that certain things are folded into other things for efficiencies? What are those things? How could we save on management costs and department head costs by collapsing departments? I brought this up at council before, but during the Great Recession, Gardena collapsed a lot of their departments, unlike the county way when they created the DCO system where they put departments together and created higher level positions. When I'm sorry, when Gardena did it, they collapsed it and reduced the number of department, had salaries, reduced the number of management positions. And so that really helped with the structure overall. And then I just want to say that I recognize that there's a big difference between capital investment and our ongoing operating challenges. And I want to be sure that I'm a go forward basis. Our capital investment is spent on things that reduce our ongoing expenses best. So if we can invest in some kind of. I'll give you an example. L.A. County is looking to buy a testing machine. We have a lab, so we're in a position where we can do that. Our costs for tests for COVID go down 66% if we have our own machine. Then we start factoring in staffing costs and the such. And what does that look like? And it's still a significant cost savings, not just when it comes to COVID, but let's talk about it when it comes to city services. If we're able to buy something or do something or automate something in an area where we can still preserve people, even if the types of jobs change, as you said, holding the vacant positions open and allowing people to move around, maybe automation of parking in certain places in the city that are currently staffed and other things. Those investments can save us in the long term and can one or two of those could save an actual person's job, and that job could mean the lifeblood of their family. And so I think that those things are critical for us to consider at this time. Thank you for the great presentation. I plan to be continuing to monitor this closely, and I look forward to having a further discussion with the Budget Oversight Committee. Thank you, Councilwoman. Also, I know that councilwoman for your cure. That's also a motion to approve or receive and file council. Yes. Yes. Thank you. Uh, Councilmember Pierce. Thank you, Mayor. Thank you, Staff. I really appreciate, Tom, the way that you've come forward with your first budget as city manager. I recognize it's not the ideal budget for any city manager to have as their first, but you definitely have the experience and have worked with this council long enough to understand kind of how we're all thinking. And I appreciate that that was reflected in your presentation. I really appreciate the outcome based approach and talking about the equity lens, the conversation you had about what what is public safety, which is something that for the last ten, 15 years of my life is always a question that comes up for me, which is, yes, it can be police officers to some, definitely it can be firefighters. But we also know that public safety for so many of our most vulnerable is access to jobs. It's youth programing, it's mental health. And so when I think about the unique moment that we're in in history and really thinking about what does it mean for the city to be to provide essential services? And I think that our essential goal is to make sure that should there be a rebound or another surge or should there be another pandemic in in five years, how are we as the city, really positioning ourselves so that it doesn't get this bad? Right, because we know that this health concern has really impacted so many. And so I echo the same comments I made last time around. Investment in climate. And I want to take that to the point that Councilmember Mongo just said. We do have a lot of capital investment projects that are in dreamland that we haven't brought forward. I know from talking to staff that there's a long list of things that they'd like to do as we look at capital improvement projects, thinking about how we can reduce our energy bill. So I would really be curious, you know, one on one maybe with our finance team to understand what our electricity bill is for the city and reminding us that whenever we do investments or tries to get microgrids on facilities like fire station or parks that we could be able to lock in our energy cost at 2% growth every year instead of something as high as six or 8%. And so thinking creatively about that is where I think we should think when we're talking about capital improvement projects. As I mentioned, I feel like the the jobs program and everything that our economic development team has done has been wonderful. We have really demonstrated a short period of time that that team can step up, that it can reach a community that historically hasn't been reached before. And so when we talk about essential making sure that we are thinking creatively about how to maintain staffing there. It was brought up about youth services and the fact that right now we don't have a summer program planned as a mother of an eight year old. Trust me, I would love to have a summer program even if they put them in bubbles where they couldn't touch each other. I wouldn't send her away. I'm kidding. But I do think that there are some creative programs out there. And I did talk to Scott today about programs, whether it's an online program that's 2 hours a day with park staff facilitating a Zoom call. That's what groups like the Girl Scouts are doing. What are some of the other summer camps are doing? So I don't want it to be something that is cost prohibitive because we are trying to maintain our budget, but really thinking about how we ensure that our community doesn't go nuts in the next year if we continue to have this lockdown or, you know, shift. I had two questions around oil revenue and I wanted to understand, when we budgeted for oil, we haven't budgeted for 55 a barrel right now. What's the lowest that the city has budgeted for oil revenue in the last ten years? Council member, we have budgeted as low as $35 a barrel in FY 17. Prior to that, we went even as high as $70 a barrel. And if Y 13, 14 and 15 and in oh nine, we went even higher than that to $85 a barrel. And we learned our lesson very quickly that budgeting at the actual price is very risky. And so our practice from lessons from the past history has been to budget more conservatively, at least at a minimum, $5 below what we think the actual revenue will be, so that we end the year with a little bit of a cushion and some anticipated one times. But we have budgeted as low as 35 in FY 17. Okay. Thank you. And that was helpful to understand that $5 below what you estimate. So I'm just curious about what policies there might be around trying to budget, you know, very responsibly with that. The other comment that I'd like to just make sure we talk about as we look back, I agree also with Mungo's statement around let's look farther than five years, because we know that this council is a council that's gone through everything to get what we have now. And so looking at the previous councils and saying maybe there's something that's there that's not working or that we're budgeting for that isn't necessarily efficient. And it wasn't mentioned yet. But as we talk about equity and making sure that everybody has access and that we're making sure our neighborhoods are safe. I would like to make sure that we maintain the language access program that we have worked so hard over the last seven years for and making sure that all of our residents really have access. And I think, Tom, you've done a great job just in seeing the community meeting that you had with our Latino community, very different than what was happening last year. And that really demonstrates the value that the city is carrying forward with engaging everybody. And so language access is being a part of that. So I look forward to going through this process. I know it might be difficult for some of our community members having a shorter timeline. And so I just I appreciate your guys work on this. It's not an easy task. Thank you. Thank you for that, councilwoman. Next is councilmember supernova. Thank you. Just a couple of points. Mr. MODICA, I'd like to go back to slide 24 and the fifth bullet point down. You're probably not surprised I'm going here. I think I made a very compelling argument about this topic in the past, but it may not have been convincing. That point is defer decisions on the fire and Police Academy until later in the fiscal year 21 budget process to better understand funding and budget from a. And what I would like to do is propose that we go ahead and conduct that fire academy in August. And then possibly, if you need to, you know, eliminate one, it would be, you know, that February class. And the reason I say that is. Now some of the points that I made before that we are in the pandemic right now, it already hit prior one time. We hope it doesn't hit again. But there's always that vulnerability as you get past guys, you get into the fire season where we have automatic aid, uh, mutual aid, and then you. These other jurisdictions, they may be hit by COVID also. So this is not a time when we have the luxury of limited staff with fire. And heaven forbid you just saw a couple of nights ago, L.A. City lost ten firefighters were injured in one fire. And we just need to keep fire fully staffed and make sure that you have everyone in place and functioning at 100%. If you if you don't do that, you risk firefighter safety and public safety all the same time. That's a statement. Tom, if you want to respond, go ahead. But my asking is very simple. Let's go ahead and. Go. Will be. Um. Um. August. Um. Academy for fire. And then if we have to make adjustments later, let's look at that. The other well look point. Oh, I'll tell you, I talk about three sweeping and other cities eliminating some of that. But I'll wait to our other agenda item tonight to bring up those points. And just one final point I'd like to make. And this goes back 18 years, and that is I served on a fourth District advisory committee in 2002, and we're having lots of challenges back in 2002. And one topic that came up right away, and I know it's not in your presentation, was the sale of city assets. And I think time they talked about city buildings. So I'd just like to ask if that is something that would be on the table is. You are free. I'm sorry you broke up, Daryl. Can you say that again? Council member We couldn't hear you. About that or what are your thoughts? Can you repeat that? Daryl That did not come through. Okay. Can you hear me now? Yes. Okay. So in 2002, when we were in tough budget times, one of the first topics of discussion was the sale of city assets, including building buildings. Is that a discussion for later on in this process? Is that being examined now or it's just not part of the presentation? And is that a more drastic way you look at it later date? So to answer that question first, I think we we're open to anything. So, you know, my challenge to the departments and others is to look at how we've done things, look at how we've done things. We can do things differently. If that means there's an asset that we can put in play that would help, I'd want to be able to see that and review that. And if it makes sense, propose it to the council. Okay. Thank you. That's all I have for now. Thanks. And I did want to clarify the question on Academy. So we have been through several years where we didn't have any academies and that was part of the budget strategy of the Great Recession. It did save some funding, but it also led to some problems later where we went four or five years without any new police officers and firefighters, and we're still feeling the effects of that today. So I do believe that academies are important, that we, you know, can't be too shortsighted and and not do academies at all going forward. That's going to have to be part of our strategy. I am concerned just about the short term timing. We have one coming up in June, I believe in July for P.D. and August for fire. I'm looking to get a little bit of room by looking at a couple of months of pushing back so we can make some decisions. And just so we understand how this affects things like the safer grant, the rest of the budget police, the number of people, the retirements, and even looking at how many firefighters were in police, we're going to need. So this right now is a shorter term decision just to allow for that analysis. And I wouldn't expect it to be pushed much longer than, you know, a month or two or three. So that's really our thinking at the time. So I think in case they broke ups of what I was what I was saying, if you can hear me, was that I would like to not forego the August Academy. I don't know. I think we should probably take a look to see if eliminating a training academy would affect the safer grant and also just the timing of the year. And as I mentioned in viruses and whatnot, I would much rather look at a later academy for elimination as opposed to one to make up in August. So that's it. Thank you. Thank you, Councilmember. Councilmember Richardson. Thank you, Mr. Mayor. First of all, I thought the presentation was incredible. You know, this is this is we're heading into a difficult time. But somehow this presentation and maybe I'm a serial optimist, but I feel good about going into this process with with with Tom delivering the framing that he delivered about a balanced outcome approach and making sure that we still resemble the city still resembling substance itself in some ways as we come through this. I think I was glad to hear the confidence in Tom saying that our team is up to the challenge. That's incredibly important. I have support from your leadership. I heard the question, what are our values? That was important for me to hear that values are going to be a thread that sort of guides the decisions that we will make. And we need to make sure we have a full understanding what those values are across the city. What's our what's our philosophy as the city, as it relates to our budget? I think a few things on it sort of highlight. I think the economic investments are important. If we're talking about a 3 to 4 year recession here. This is an opportunity to plant some incredible seeds and seeds that will allow us to come back even stronger than we were before in all parts of town. I remember when there was a little bit of, you know, every once in a while we hear about, hey, we're able to make this investment in this project to make it happen. But we were able to get the money back through the increased property taxes or increased sales taxes that will generate on this project. I want to hear more of that as we move forward. Where are the other seeds that we can plant in all of our neighborhoods to really make sure that our economic engine is booming over the next two years? I was proud to hear that discussions have gone well with our employee groups. We will certainly need buy in from our entire city family in order to preserve the quality of public services that we have. I was around I started in the city in 2010 in the midst of a tough budget and budget season. That was you know, that was I remember that was the budget. That rescue 12 was cut. I can speak to you know, I know that there's going to be a lot of conversations about priorities. And what I can offer now is that what I'm really looking for as we make these decisions? I think we're too early to talk about what the priorities are today, but I'll be looking for certain conditions on how we make those decisions. And I think that balanced outcome approach sets that up quite well. I think one is we need to consider and reflect on data. So as we approach prioritization of cuts, I want to know more about the context to everyone's ability to access services no matter what neighborhood you live in. For example, in his neighborhood, what is the per capita rate of access to your library? If you have 50,000 people with access within a mile or two miles of your library that we need to understand if that library hours were cut, hours it to have a greater impact on that significant amount of people, just as an example. The same applies to afterschool programs, tree trimming streets for street sweeping emergency response times. I know a lot of times we talk about as it relates to emergency response times, what the overall citywide average is. But when you peel that out and I had to learn this the hard way, I didn't realize it initially. But that cut to Rescue 12 gave North Long Beach a 3 minutes later response time in emergency responses than everywhere else in the city. We had to peel back, you know, layers to understand that and which made it incredibly important. We were just going on with the citywide average was so we need to understand what those impacts are so we can we can understand what the base level commitment is will provide to the city, not the average, the base level commitment. Everyone should meet a minimum standard for every one of these services, not the average on minimum standard. And see how we all compare to what that minimum standard is across the city. If one one area town has a much significantly lower, lower, lower response time or low access to some service that should affect every one of us . And that's the way we should really be thinking about this thing as it relates to public safety. I was glad to see the reference. The public safety continuum was reflected in the presentation. It's important to our community and frankly, it's a part of the values we've talked about for the last ten years. Public safety continuum. The outcome of safety is it's judged by a broad set of factors beyond crime statistics. Yes, we want crime down. We want response times low. But safety to me also means that our streets are clean, well-lit. It means our parks are activated and graffiti is abated. It means. That means public works. Parks. Animal control. Animal control. Libraries, health. They all play a part in helping me make our community and keep our community safe. I'm glad to hear that we're moving forward with our academies. I'm glad to hear that the reference to the academies that were canceled in the early 2000s and the way that that affected our ability to respond. And so it's great to hear the framing that, hey, we're moving forward, I think is responsible, that the city manager saying, let's evaluate the impact of the safer ground and the size and scope of the academy. So I think that's responsible to do. Another thing I'll say, just based on witnessing this, this process in the past is contracting out. I think I've heard it a number of times. We're proud of the quality public services that we provide as a city. We want to continue to count on that. It's quality because those are those are hard working city employees. We know their name. We know they're going to retire from the city and they love this city. So we need to really be mindful of as we explore, as we explore ways to innovate and use technology that we're mindful of, of contracting out and protecting and preserving our quality both services. The last thing I'll say is, you know, I think these it's going to be a few difficult years. That's true. But this is a real opportunity for us to reinvest and reimagine, to set the stage for a truly robust recovery in our economy. That should be our focus. If we really focused on thresholds, outcomes, service outcomes and set the stage for robust recovery. Thanks a lot. That's that's my. Thank you, Councilmember. Appreciate that, Councilmember Austin. Well, I thank you. And I think my colleagues have said most of what needs to be said, and I appreciate all the comments thus far of Tom. I thank you and financial management staff for giving us a very, very clear. Outlook on what is facing us as a city in terms of our finances. I did do have a couple of questions and then a couple of comments as well. I'm not sure if I heard it, but we do know that there are other actions you take you both the state and federal level that could yield windfalls of of moneys to our city to help us deal with COVID 19. And I would hope that should that happen, I think that should that happen many of the. Conversations regarding potential cuts to our budget will be mitigated. And I'm speaking particularly to the Heroes Act for Congress right now. Well, let's hope that the US Senate and the President do the right thing to help not only our city but the rest of the country. I didn't hear a lot of conversation regarding how we are going to be utilizing our reserves to to to deal with this crisis. And perhaps you can enlighten us again on that, how strategic or if we're going to be using our reserves strategically to to bridge any gap. I tend to agree with the comments regarding. Public safety. Yes, public safety represents two departments, represent almost 68% of our budget, a little over that. But these are critical services for our city and they should be prioritized. I think our residents would agree with that by and large. But at the same time, we need to to consider. The personnel there and the human resources that we have in those public safety. Officers and firefighters that that we invest so heavily in. I guess the one question that I have and will have is, you know, as we move forward in the budget process above the budget oversight process. I'm always curious to know where are our our city staff is and what the outlook is on on retention, retirement or I think those have that information will help us make good, sound decisions, particularly when it comes to our our our our personnel budget moving forward. I'll remind you all that I'm reminded by this. That. That in 2012, when I joined the city council we were facing a month later we were hit with a $17 million budget deficit projected for NY 13. And obviously then it was quite a task for the City Council where the cuts that were being proposed were enormous and obviously that is. What we're facing today is is significantly higher than that. So the decisions before us are going to be great. I'm super excited and I'm thinking, Chuck, Tom, for reaching out to our bargaining units, our unions throughout the city. Their partnership in this is going to be critical. Their involvement engagement in this process is going to be critical for us all. We are in this together and we want to come out of this as a stronger city. I do think that we should be looking at. All of our contractors contracts are evaluating those very carefully and in-sourcing the work where we can. We do have a very talented staff and even looking at consolidating apartments, redefining our city where we can do that, you know, right sizing where we can. But from a standpoint of sensitivity and understanding that the people that. Personnel that work for the city have done so diligently, faithfully, for many years, and they are the face of the city. Most of the time. And so all I'm really, really interested in understanding more about the balanced outcome based approach. This is a first, and I'm sure it's an innovative approach of learning more about that as we engage more in this conversation. And I think there was some conversation regarding projects. I understand this is budget. Our biggest challenge is to be more more programmatic general fund, not necessarily projects in terms of one time funds. So I would just say that there are jobs associated with those projects as well and jobs that are important to our economy. And so let's not be too quick to cut. You know, public works projects that that that are that are improving our infrastructure. And making our city safer as well. So I'm going to reserve the rest of my comments. Looking forward to a robust conversation. With the Budget Oversight Committee and the rest of the City Council for weeks and days. The. Council member, Vice Mayor Andrews. Yes. Thank you very much. First of all, I want to thank you and Grace and everyone to help with this presentation together. I'm not going to make it long because we have a big agenda tonight. So this is how I'm accountable. You know, until a U.S., as you know, managed that time. But you were there and we got through that. And I feel very, very confident you being on the know with this. And so I think there's so much that we have to look forward to and looking forward to continue to work so we can make some decisions that keeps the livelihood of our city. You know, I really think we can afford to put our public safety at risk. You know, our infrastructure is important and a continued workforce is vital. So we are really, really going to have to keep an eye on this. And so with that, I think the presentation was everything that we saw there. So there will be more questions right now. I think, you know this great presentation and thank you again and your crew. Thank you. Vice Mayor Andrews, I want to go to a councilman in house and then I've got a group of folks that are chewed up for a second time. So we'll go to you guys after Councilman De. You, Maer. And thank you so much, Tom, and city staff for all of the hard work that you've put into this. I echo all of my colleagues sentiments in regards to this item. It's it's terrible time that we're going through. But I feel very confident that we will indeed take a good look at this budget. And together we will come up with a really good resolution so that we can indeed come out stronger from this. One of the things that I also want to echo is the importance of our public safety, especially with police and fire. I think that a couple months back, I remember hearing people throwing out the words, oh, we another recession is coming. You know, we should expect another recession. And I would be like, Really? Hmm. But but never in my wildest dreams that I that I think that something this this that mental would happen to our city. And with that said, I'm so glad I'm so glad that we have a city manager right now that is at the top of his game and that knows budget very, very well. I feel very grateful to have you leading this time. With that being said, you know, we are in a recession. And I also think back of when people said, what happens if we go into another crisis? And I'm not talking about just, you know, Corona virus again, which, you know, could or could happen again. But I'm talking about those things that are also unpredictable and that are out of our control. Like if we have a major earthquake, what is going to happen with that? You know, we are a state that is very prone to earthquakes and we should expect that. But we've been very lucky to not have had one. But what if that happens? You know what will happen. So those are things that I worry about a lot. That's why I go back to how important it is to keep our public safety. I agree immensely with my colleague, council member, super not in the fact that we cannot we should not risk. Not having our fire academies right now. I think we need them more than ever right now to prepare ourselves not only for a second round of COVID. That knock on wood will hopefully will not come, but also from any other catastrophes or any other things that might affect our our safety, our public safety in in this city. I'm I'm also very prideful to have our own police department and our own fire department within the city, and they take such great care of us. Then I think that it's time. Times like this that we need to take care of them. I think that bringing on the academies, at least the ones that are scheduled to come sooner than later, and then let's work through them and see how we can adjust those. And actually, if we need to eliminate something further on down the line, then we should. But right now, I think that that that to me is very important. So I want to make sure that that we do continue to have those the media that can and be also, you know, from a budget perspective. We could also say that when new new recruits come on to either fire or PD, they come in at a much lower rate than those who are retiring. So maybe we can think about some incentives that could help people retire sooner. But, you know, and also seeing that after this pandemic, those that were maybe in the verge of deciding whether to retire or not retire might be deciding to retire. So then that would leave a little bit of room to be able to bring some of our new recruits into our department. So again, thank you all for all your sentiments and thank you staff for all the great work that you're doing. And I'm I'm very hopeful that together as a city and as a council, we will come out of this stronger than ever. So thank you very much. Thank you. I might go back again for a second time to some council members council oranga. I would call the comments have been great. Thank you. Okay. Thank you. We know we have a long agenda. Councilmember. Here's for you up again. Yes. Just very briefly. Yes, we have a long agenda. I wanted to just briefly echo the comments around the academy. I know. I guess my question is more about if there's a. There is a way to craft the academy differently versus just saying that we can't fund them. And so I agree with what the comments that have already been made. But as we look forward, this is always a good time for us to kind of restructure and say if it's 7 hours this day, does it make sense to make it six and then do X amount of training, you know, and at a different time ? So I'm just curious about that and I don't need an answer necessarily. And then wanted to I just really appreciated Rex and I haven't talked about the budget conversation at all, but I appreciated hearing how he brought up access to services. And I think that that to me is really what the lens needs to be. Call it whatever you want to call it, but everybody should have the same access to resources, even if that means that that everybody's time is a little bit more delayed. But I appreciate all the comments that have been made and agree on the comments around stopping just, you know, making sure that all of our all bargaining units that are coming forward, that we're obviously negotiating in good faith and that we're all being asked to kind of do the same thing as much as we possibly can. So thank you. To come. Thank you, Councilwoman. Councilwoman. Mongo. Thank you, Mayor. Just another quick question. Are we accounting for the percentage each of our public safety agencies is in relation to the budget. But when we. It. Councilmember. I think you're breaking up a little bit. Can you repeat the question. Into consideration, have a significant reduction in overtime due to special events. But it does the percentage of the budget that they are on a go. Can you hear me now? Can you hear me now? Yes. Okay. So when we talk about the percentages on one of the slides in the presentation, police and fire and public safety and preparedness and the EOC and dispatch make up 70% of the budget. And one of the things that definitely has hit our communities is a considerable reduction in special events. And a lot of times that special event overtime is matched with a special event revenue. And so has that been taken into account in the percentages on a go forward basis with a reduction of these special events? Councilwoman. The projections of costs have been taken into account in terms of the overall FY 20 general fund and ACP expenses. In terms of the percentage, if you're talking about the percentage for the budget targets. Those are viewed more from a budget expenditure percentage perspective and is a starting point to generate options. And the final decisions would really be based on what Tom was talking about, the balanced outcome approach that's just based on their current budgeted expenditures. But in terms of looking at our actual expenses in the year, we are looking at things like overtime and savings there, as well as additional expenses that were unexpected. Thank you. I just want to close by saying once again, it's going to be a difficult time. We're going to get through this together. Hopefully we'll get through it stronger when we come out than when we went in. But we do need to. Really as a council, look at what our priorities are because this will not be none of these decisions will be easy. Thank you. Thank you. Councilwoman Gottesman, our concern is that you again? I'm not sure. Yes. Yes. Okay. Thank you, Mr. Mayor. So just hearing the conversation, I think the Academy, you come up a lot and I just want to hear a little bit more from staff. So. So what stage are we? So, Mr. Modica, what stage are we in on this current academy? Where are we in that phase? I know that we discussed this being one of our first with our new diversity program, the Diversity Officer and Fire Academy. And I want to understand sort of the risk to this potential class. So can you give us an update on where we are with this? Yes. So we also have Chief Luna here and Ray Toohey, who can answer some specific questions about fire and police academies. So Fire and Police Academy is scheduled to begin in July. And right now, the police or Fire Academy I'm sorry, the Fire Academy is scheduled to begin in August. The diversity officer has been doing their work and both classes have done good outreach related to diversity. So I'm very cognizant of that. I don't want to lose that good work. What I am really asking and looking at is to push it back a little bit within some months so that we can and also look at the size of the classes just so that we can really rightsize those academies to where they need to fit and just understand the financial implications. I also have some COVID concerns. We've been tracking L.A. City. They had an academy class where 17 recruits tested positive. They put in a lot of different protocols and still had 17 recruits test positive. So bringing that many people together in an area is not really, you know, conducive to COVID. So I am looking at you again, giving us a little bit of time. We are in you know, we're not looking at losing those classes completely. And at least allow us to do some additional analysis. So if I didn't answer the question, we have both Ray Tuohy and and Chief Looney here. Sir. Can I speak to the question? Okay. Well, I think fire has been the bigger question. I'll bring up Chief Tuohy. Thank you. Councilman Richardson, this is deputy chief to a yeah. We are at the background check. The packets have all been received of of approximately in excess of 50 candidates for both classes. They're being evaluated by support services. So we're in deep into the process. The challenge for us, for the fire department is the high caliber of candidates that are a part of our process. They're also being evaluated for other local agencies. Chief Espino and I are on a weekly conference call with the area fire departments and more than half of them in excess of 20 departments are advancing on their hiring process and these candidates are high on their list as well. So we want to capture the quality that Long Beach attracts. The once the background process is completed, they'll head towards the medical. And if if in fact, the August class proceeds, then they'll begin the first week of August. Okay. So here's what I would offer to that. I think we need to make sure that as we balance the fiscal impacts, let's say, for grants and all those other things, we also balance the integrity of the class that we are attempting to put forward. I know that a lot of work has gone in on these classes. I also know that it's difficult to maintain. You know, we've talked about this for a while. Efforts and outreach that goes into making sure we have a diverse police force and fire department. And, you know, I want to make sure those things are not compromised. So what would be helpful to me is to understand, you know, before we make decisions, I understand what's happening in some of these other departments. Are they delaying? Are we sort of if we delay that, triggers that they will participate in other academies happening in other agencies? I really want to make sure we factor that out. I want to I want to say that you should do your you know, do your fiscal diligence. But let's make sure that we are balancing the risk to the rest of the academy as well. You know, if this delay is risky, I'd like to know that. Thanks a lot. So my own counsel, I think there's been a lot of questions just on academies, and I certainly understand that given how much we have left to work on tonight, I'd like to suggest that come back with kind of a report on the academies, the financial impacts, how much they cost, how much they're going to cost if we keep them on the current schedule, potential impacts, safer grant, all that type of thing. So I'll prepare that and then try to answer some more of those questions. Thank you, Mr. Modica. I know we have a long agenda. Have folks have queued up for a second time again. So I'm going to go through them hopefully to. Their. Expeditious. Vice Mayor Andres. Okay. Councilman's in Dallas. Yes, ma'am. Thank you. I'm here. Okay, go ahead. You do that on cue, up more than once. But I really want to go back in green with the super, because I don't really think we can afford to jeopardize our academy for the summit. You know, and also, you know, we talk about math, how increase in emphasis on full time personnel. I want to make sure that we hear that they really do hear me loud and clear that the proper engagement with appropriate unions but use up to par. So please work with our union. Keep them involved and informed before making any decisions that will affect their members. Thank you. Thank you, Vice Mayor. Councilman Sun has. Thank you, Mayor. Really quickly, just wanted to say thanks to Tom for providing that information about other academies and and for letting us know that there have been COVID positive cases in other academies. That seems like an enormous amount, something I wouldn't want to put our academy through. But I think that I I'm confident in the organizers of the academies that they will indeed learn from those agencies and be able to be prepared to be able to conduct an academy at this point through COVID, because, again, we need them. Another thing that I wanted to say is that especially because all of these candidates have already been in process, they've been told that they're going to be joining the academy, especially for Fire and the Argus, I think guess is close enough, but yet far enough that there could be a lot of the implementation of social distancing and ways that we can we can reorganize what the Academy looks like for the fire department. So thank you again for sharing that information. And I look forward to hearing the report on this. Thank you. I think that was everyone that was queued up a second time. So let me go ahead and we have a motion in a second to receive and file the report. Thanks again to staff for a great update. More to come, of course, and appreciate all the input tonight from from the council. I know the staff does as well and they'll use that input as we move forward. So can we get a roll call vote on the receiving file? District one. I district to. My. District three. Please. Please mute your phones, guys. If you. If you are. Go ahead. District three. District four. All right. District five. I. District six. All right. District seven. By. District eight. I. District nine. All right. Motion carries. Thank you very much. Thanks again for the budget presentation. So let's go on to the rest of the regular agenda. We're going to do item 25.