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Council requests audit of Tidelands Fund; $200,000 funding to be considered through budget process
Summary
Council voted to request the city auditor conduct a performance audit of the Tidelands Fund group and agreed that any $200,000 appropriation to support the work should be considered through the normal budget process.
The Long Beach City Council on Feb. 4 approved a request that the city auditor conduct an audit of the Tidelands Fund group, and councilmembers agreed the proposal to allocate $200,000 to the auditor’s office should be processed through the normal budget review channels.
Councilmember Rex Richardson (note: motion maker) said he wanted a fuller accounting of how tidelands revenues and expenditures — which fund marinas, waterfront assets and other beach-related projects — are being managed, and he expressed urgency because some revenues tied to oil operations are expected to decline over time. Richardson said the goal was to form a long-term funding strategy so projects such as pier repairs and water-quality investments are not shifted to the general fund in future years.
Assistant City Auditor Alvin Chu told the council the city already undergoes an annual financial statement audit by an outside firm (previously KPMG; Crowe LLP referenced as a new firm), but that a city-auditor-led performance audit would examine how tidelands funds are being managed and whether they are being spent for highest community value. Chu cited a prior city office review that identified $9 million in reclassifiable construction-and-demolition funds; he also referenced an analysis estimating a $301 million impact related to the city's transition away from oil, a portion of which could affect tidelands receipts by 2035.
City finance staff said the tidelands group is complex and involves multiple departments (finance, public works, marine bureau and economic development). Staff cautioned that an auditor-led review would require department time to respond to requests for records and interviews, and that an appropriation for outside assistance would be considered as part of the budget process.
After discussion about timing and department workload, councilmembers agreed to move the $200,000 funding discussion into the budget oversight committee/budget process and asked the auditor’s office to proceed as capacity allows. The clerk recorded the final vote as "Motion is carried."
