City Council approves Mayor's Grow Long Beach initiative -- which asks city to wean off oil revenue

Mar. 7—Long Beach Mayor Rex Richardson's vision for the city's economic future, dubbed the Grow Long Beach Initiative, has gotten its legs — with the proposal's unanimous approval by the City Council on Tuesday, March 7.

Richardson initially announced his plans to develop the initiative during his first State of the City address in early January.

The Grow Long Beach Initiative motion proposed during the Tuesday evening asks the City Manager's office to deliver two main components: A plan to propel the economic development of Long Beach's main industries, such as aerospace and tourism — and to explore alternative revenue streams that could help wean the city away from its longstanding reliance on oil money.

"For generations, Long Beach has provided critical city services that have relied on revenue streams tied to the production of oil and fossil fuels," Richardson wrote in a March 7 memo to his colleagues. "As we enter the 2030s and begin to plan for a more climate sustainable economy, this practice will gradually come to an end. It is clear that relying on fossil fuels as a local revenue source to support core city services in perpetuity is not feasible, not only from a community health perspective, but also from a financial perspective."

Current projections show that Long Beach's oil revenues are set to decline by about 10% annually through 2035, Richardson's memo said. And because the city is required to reserve a bulk of that funding for oil abatement and cleanup, the money — which helps pay for crucial city services including the Fire and Police Departments — are likely to decline at a rate of 25% each year, though that rate is subject to variation.

"This presents a significant challenge to the city's fiscal outlook, as nearly $12 million of existing General Fund city services are funded directly by revenues tied to the production of oil," the memo said. "If the city wants to avoid cuts to these oil-funded services, new structural revenue streams will need to be identified to offset or raise revenues beyond the eventual $12 million gap."

The mayor's plan calls for the phased-in development of Long Beach's other highly profitable industries: Healthcare, tourism, aerospace, education, the Port of Long Beach and the supply chain, the arts, and hospitality.

"We have to really think about how we fund our city and how we grow our economy in new directions that really allow us to not only continue delivering services in years to come," Richardson said during the Tuesday evening meeting, "but ultimately expand — because we want to have a city that is more responsive and that delivers quality public services in the years to come."

Though the Grow Long Beach initiative is a long-term plan for the city's economic future, Richardson asked city staff to handle his requests with urgency so that they can be incorporated into the 2024 fiscal year budgeting process.

"We want you to be creative," Richardson said to city staff during the meeting. "This motion really kicks off a long-term conversation about how we ensure that our city thrives in the years to come — I want short, medium and long-term opportunities. This doesn't have to all come back in one report, (it) can come back in different iterations."

The City Manager's office, meanwhile, will begin work with the Budget Oversight Committee, the Economic Development Department, and the Financial Management Department on feasible solutions to the revenue problem, though its unclear when the City Council will hear another update on the Grow Long Beach Initiative.

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