Long Beach budget hearing spotlights public health cuts, Tidelands revenue shortfall and development workload

Long Beach — City officials told the Long Beach City Council on Aug. 19 that the city faces growing fiscal pressure from declining Tidelands (coastal) oil revenues, shrinking federal and state public-health grants and continuing operational costs, even as Community Development and permit services try to keep up with record housing activity.

At a continuing budget hearing that grouped presentations from Community Development, Health and Human Services and a Tidelands overview, department leaders outlined short-term budget moves and longer-term risks — and asked the council for direction on choices that could protect frontline services.

Community Development Director Christopher Koontz said the department has expanded staff and technology to process a surge of small residential projects and a record number of housing entitlements. “We issue more than a thousand permits each month, and we’re spending $40,000,000 to have the best permit software in the industry,” Koontz said, describing a new LB Build permitting system and additions such as a dedicated counter for accessory dwelling units and extra inspectors to speed turnaround.

Koontz warned the council that the department’s fee-based Development Services Fund covers most operations and that workload has shifted from large projects toward many smaller projects such as ADUs, requiring different staffing and fee adjustments. He said the department proposes 259 budgeted positions (up from a 255 base) and limited fee increases to sustain customer service goals.

Health and Human Services Director Lisonbee King described deep cuts to public-health grants and the department’s plan to preserve core programs. She said the city has seen about $3.9 million in grant cancellations, reductions or terminations since January 2025, impacting 16.2 full-time equivalents and eliminating 10 positions so far. King gave specific examples: the SNAP‑education program funding will end Sept. 30, representing about $900,000 and 6.5 FTE; an LA County pass-through for HIV/STI prevention represents about $1.6 million and 8.5 FTE; and other reductions have cut work across immunizations, HIV prevention and public-health emergency management.

“The reductions strike at the heart of our core public-health services,” King told the council, and described operational responses: redeploying staff, seeking alternative grants, repurposing existing positions and asking for one-time investments to maintain newly launched programs such as the citywide Community Crisis Response team. King said the CCR team, which delivers non-law-enforcement responses to behavioral-health and quality-of-life calls, has served more than 900 individuals since inception and has seen eligible calls increase sharply since citywide rollout in July 2025.

City Manager Tom (presented as city manager in the hearing) and deputy presenters walked the council through the Tidelands fund — land and revenues tied to tidelands that the state holds in trust but has granted to municipalities including Long Beach. Staff described long-standing legal and legislative arrangements that currently leave Long Beach receiving only a fraction of oil revenues produced on its tidelands. Bob Dow (presenting Tidelands revenue topics) said the Long Beach Unit and West Wilmington operations historically supplied most of the tidelands oil revenue; changes to revenue sharing and regulatory constraints have reduced proceeds. He said state actions and new laws such as SB 1137 (which created a 3,200-foot health-protection buffer around some wells) and recent injection‑pressure directives have cut production and that, assuming $65 per barrel, net oil revenues could decline toward zero by FY 2032.

Staff said Long Beach tidelands currently support beaches, marinas, the Queen Mary, Belmont Pool, convention center subsidies, lifeguard programs and shoreline capital needs. Tidelands revenues cited in the presentation included about $25 million from the Port (5% of harbor gross profits), about $11 million from parking fees and citations, about $10 million in net oil revenues (declining), and other fees and interest. Staff said unfunded Tidelands capital needs exceed $1 billion, including seawall and pier projects; the city auditor’s 2024 estimate warned of $300 million in lost oil revenue over the next decade if trends continue.

Public comment during the hearing focused heavily on requests for new or ongoing local funding for violence prevention and legal defense for immigrants. Several speakers urged the council to add or protect funding for the Long Beach Justice Fund (requests cited $1.8–$2.2 million in new structural city funding), tenant right-to-counsel allocations (requested $2 million), and youth participatory budgeting and violence-prevention programs (requests in the low‑millions). Barry Stees of SURGE Long Beach and others urged full funding of the Community Crisis Response team and a 24‑hour non‑emergency line that would route appropriate calls directly to health‑centered responders.

Council members praised the departments for the volume of work and urged staff to keep seeking state and federal support while preparing contingency options. Council and the mayor highlighted that the Tidelands challenge has statewide roots and will require intergovernmental action; several council members urged immediate legislative outreach to Sacramento to seek changes in the state surplus determination and to secure more local share or transition funding.

Votes at a glance: the council voted to continue the budget hearing and return with more detail at the next regular meeting; separately the council later approved several agenda items tied to tidelands and the budget process (see “Votes at a glance” below). Mayor Richardson and multiple council members emphasized a multi‑year transition strategy to diversify Tidelands revenue — including event and venue activation, marina modernization and revenue‑generating assets — while pressing the state to meet abandonment and remediation obligations and to revise longstanding surplus calculations.

Why it matters: Long Beach depends on a combination of grant funding, fee revenue and Tidelands receipts to deliver services ranging from public health to beaches and marinas. Rapid federal grant cuts and declining oil‑based revenues force choices that, if unaddressed, could reduce services or shift costs to the general fund. The hearing laid out potential near‑term options and long‑term strategies and generated public appeals for immediate local investments in violence prevention, immigrant legal defense and youth programs.

What’s next: Council voted to continue the hearing to a subsequent meeting so departments can return with more detailed proposals and cost estimates. Staff said they would pursue state and federal advocacy, continue implementation of process improvements (new permitting software and recruitment/retention work in Human Resources) and return with financing options for priority capital projects.

Votes at a glance - Council vote to continue the FY26 budget hearing to the next regular meeting — motion by Councilmember Rick Sodhi; second not specified; outcome: approved (roll call vote recorded). - Council later approved a separate motion (agenda item 18) directing the City Manager to work with the Government Affairs Office to add to the city’s legislative agenda a request for the state to update the Tidelands surplus determination and present recommendations to the Intergovernmental Affairs Committee (mover: Councilmember Suzanne Duggan; second: not specified; outcome: approved). - During the same meeting, the council also approved ancillary consent and action items related to venue contracts and other budget matters (see meeting minutes).