Home News Tidelands Fund in crisis: Budgetary challenges jeopardize future development timelines

Tidelands Fund in crisis: Budgetary challenges jeopardize future development timelines

A man walks along the beach near the Belmont Veterans Memorial Pier, which is slated to be rebuilt ahead of the 2028 Olympics. Photo by Thomas R. Cordova.

As the end of a strenuous fiscal year nears, city leaders are proposing a new budget with upward of $30 million in cutbacks to multiple departments and funds, including the Tidelands Fund. City staff utilized creative solutions to minimize the impacts on the Tidelands but the future of coastal-area funding and its revenue streams is in question.

At just over $85.5 million, the proposed budget for the Tidelands Operating Fund, which pays for a litany of programs, services and projects—from aquarium and convention center maintenance and improvements, to lifeguards and tree trimming, to developments such as the new Belmont pool and beach concession stands—is about $9.5 million less than last year.

The closure of the convention center this year due to the pandemic alone is expected to cost the Tidelands Fund $5 million this fiscal year and $2.5 million in fiscal year 2021.

Tidelands revenue streams, including oil and parking fees along the city’s coast, have been negatively impacted by COVID-19. Additionally, Tidelands monies are likely going to be needed to cover debts normally paid through Carnival Cruise passenger fees and the aquarium’s monthly rent, two revenue sources hit hard this year.

Next year’s proposed budget includes the elimination of 19.33 full-time equivalent positions funded by Tidelands for a savings of $2.4 million. Other Tidelands cuts include tree trimming and a 20% reduction in green space mowing in the coastal area.

Eight major projects, five of which are supposed to be funded in large part with Tidelands dollars, were identified for completion ahead of the 2028 Olympics, during which Long Beach is slated to host multiple events. The proposed budget identifies a funding gap for four of the projects totaling $96.5 million.

Projects with unidentified funding include the Belmont Pier rebuild ($25 million gap), the controversial Belmont pool ($20 million gap), Long Beach Arena improvements ($50 million gap) and lifeguard towers ($1.5 million gap).

“We have identified funding as a concern,” Long Beach Financial Management Director John Gross said, referring to the budget, which states reserves that could be used for the projects may be used to cover other expenses over the next few years due to the current financial crisis.

“We don’t have enough information at this point to speculate on long-term funding possibilities,” he added, when asked if the projects will be funded and completed in time for the Olympics.

Over the last four years, the city has grossed an average of $11.7 million in oil revenue in the Uplands Fund (land-based oil production), which feeds into the general fund, and $19.2 million in Tidelands (THUMS Islands production).

For the current fiscal year, which ends Sept. 30, the city budgeted $8.8 million in oil revenue for the general fund and $12.6 million for the Tidelands Fund after setting aside $1.3 million and $5.7 million, respectively, for future well abandonment costs.

The city has opted to not pay into the abandonment fund this year or next to make up for current and future losses. For this fiscal year, Uplands is expected to generate $7.48 million, while Tidelands makes $12.3 million. In 2021, the city is projecting Uplands to bring in $4.7 million, while Tidelands generates $9.5 million.

“The average revenues are [without] any set-aside for future abandonment expenses,” Long Beach Budget Manager Grace Yoon said in an email. “[And before] administrative expenditures, allocations for operations and capital in the General and Tidelands funds.”

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