Grading the Cities introduction THE GOVERNMENT PERFORMANCE PROJECT Report Card: Long Beach Revenue Rank: 28 Form of Government: Council-Manager Mayor: Beverly O’Neill (took office 1994) City Manager: Henry Taboada (appointed 1998) City Council: 9 members, elected by district FINANCIAL MANAGEMENT: A- The hardships that Long Beach suffered in the early 1990s included the closing of a naval hospital, base and shipyard, as well as the loss of many aerospace jobs. Coupled with the recession and state money grabs, these propelled the city into budgetary imbalance from which it has struggled admirably to recover. For years, Long Beach has been trying to wean itself from reliance on one-time revenues to balance its budget. It has finally succeeded. In the current budgetary period, revenues should take care of expenditures, and the city’s 5- to 10-year financial projection indicates they will continue to do so. What’s more, the council passed a requirement in September that 10 percent of the budget be set aside for a general fund reserve. Against all odds, the city has already squirreled away this much money by using cash that would otherwise have gone to an overstocked pension plan. Long Beach gives excellent flexibility to its financial managers, while maintaining significant internal controls. Some improvements it could use: cost accounting and formal rules for use of the rainy day fund. HUMAN RESOURCES: C Long Beach is burdened by a hidebound civil service system in which hiring and recruiting for classified employees is tightly regulated. This impedes speedy action. If a list of eligible candidates isn’t available, it can take up to six months to create one. And managers often don’t have the flexibility to hire the best person. “It’s a 1950s personnel system,” says one official. Change is not likely soon, as all these procedures are mandated by a city charter-required commission. Attempted reform in the late 1970s was fought by unions and failed before it even got to the voters. The system’s only saving grace is that a substantial number of unclassified employees in managerial ranks, as well as seasonal, temporary and part-time workers, aren’t bound by it. There are some positives. Long Beach has focused considerable attention and training on how to discipline employees when necessary. Right now, not many grievances are being filed. In the 1980s, a militant police union encouraged loads of grievances, but union leadership and police management changed, the relationship improved and the number of cases declined dramatically. Managerial employee performance appraisals are done yearly and tied to pay. Management employees are also eligible for the city’s Incentive Award Program, and can receive lump-sum payments for distinguishing themselves on a specific project. INFORMATION TECHNOLOGY: B In general, Long Beach has managed IT operations efficiently. Its enterprise-wide systems are not the easiest to use, but they provide most of the core functions the city needs. There is a sensible emphasis on making sure the equipment purchased fits the requirements. Most IT investments have to be budgeted out of departments’ own funds. Now, the city is stepping in to pick up more of the departments’ IT costs. With some more money in its pockets, the city needs to develop more rigorous means for focusing on cost savings or promised service improvements. Long Beach is an innovator in IT procurement. It allows a modified RFP process, in which negotiation with vendors replaces a rigid, document-based arrangement. This has the potential of saving much time and money. CAPITAL MANAGEMENT: B Long Beach does well in planning for capital growth. In preparation for its new strategic plan, community input has been used to help prioritize projects. For example, when it was learned that the condition of sidewalks was a concern in the community, the mayor added $3 million to the capital budget for sidewalk improvements. One unusual aspect of Long Beach’s capital management is that the capital plan is created by its public works department, rather than a planning or budget shop. City leaders don’t ask for much information about the implementation of capital projects; they seem content to leave it to public works. That department, in turn, functions independently and shares little in the way of performance measures with the council or executive branch. But overall, the department is doing a good job. Its documents contain a good description of procedures, along with project descriptions and a glossary of terms. Long Beach needs more information about the condition of its facilities. It does better funding streets than buildings, but both areas would be well served with more cash. MANAGING FOR RESULTS: B- At first glance, Long Beach might seem lost on the shoals of strategic planning. Its last overall plan came out in 1986. But dig a little, and things look better. First of all, the 1986 plan worked pretty well. It established 15 policies and 98 specific action recommendations, stretching all the way to the year 2000. By 1992, some 95 of the 98 recommendations had been partially or fully realized. For much of the 1990s, Long Beach was in such dire economic straits that attention was focused on keeping the city running — not on ideas for the future. Now, there is a new long-term plan, intended to run for another 10 years and make use of extensive citizen involvement. Long Beach uses performance measurements in its budget for most city departments. Their quality varies widely, and improvement is needed in developing sensible targets for managers. “It’s in the works,” says Barbara Hennessy, the city controller. “We’re just not there yet.” AVERAGE GRADE: B Copyright © 2000, Congressional Quarterly, Inc. Reproduction in any form without the written permission of the publisher is prohibited. Governing, City & State and Governing.com are trademarks of Congressional Quarterly, Inc.