May 17, 2008

City Auditor Laura Doud Identifies Over $200,000 in New Annual Revenue for the City
 

Report Recommends Retaining TOT for the First 30 Days of a Non-Transient Stay

Long Beach City Auditor Laura Doud released a report today of her review of the Transient Occupancy Tax (TOT). The objective of the review was to identify methods of generating additional TOT revenue for the City. The review found that additional on-going revenue could be realized by the City by retaining the TOT on the first 30 days of a non-transient stay.

Under the current Municipal Code, an individual who occupies a hotel room for 31 consecutive days is considered a “non-transient” and is exempt from paying TOT. The hotel operator collects the TOT for the first 30 days, and if the hotel guest stays 31 days or longer, the entire TOT is refunded to that guest.

The review surveyed the ten largest cities in California as well as eight additional cities that surround Long Beach to determine their policies regarding refunding TOT revenue for the first 30 days of a non-transient stay.

“We found that of the 18 cities surveyed, 56% do not refund their TOT on the first 30 days,” stated City Auditor Laura Doud. “If we follow the practice of these other cities, we estimate that in calendar years 2006 and 2007 Long Beach would have received additional annual revenue of $187,000 and $212,000 respectively. Based on our findings we do not believe this change in policy will cause any competitive disadvantage for our City.”

The report recommends the City Council amend the Long Beach Municipal Code to allow the City to retain TOT collected in the first 30 days of a non-transient stay. In addition, the report proposes that the Redevelopment Agency consider amending its TOT policy to be consistent with the City’s.

“The City can begin accruing this TOT revenue immediately upon amendment of the Municipal Code. Further, this will be ongoing revenue the City can collect for years to come. Therefore, we encourage the City Council to approve this item,” concluded City Auditor Doud.

May 6, 2008

Statement by City Auditor Laura Doud Regarding City of Long Beach Public Employee Contracts

City Auditor Laura Doud today released the following statement about the Long Beach public employee contracts that were approved by the City Council this evening

I am very supportive of all Long Beach City employees and I appreciate the services they perform on behalf of our City. All of our City employees should be compensated appropriately for their efforts.

I am aware that our firefighters and other City employees are being compensated near the bottom of the pay scale comparable to positions in other Cities in the region. This is certainly an issue that needs to be addressed and I am pleased that the City Council is considering new contracts.

As the City Auditor, however, it is my duty to the taxpayers to ensure that we have the funds available to pay all of our commitments, including these important contracts.

Because of the budget challenges caused by the current economic downturn, all City departments are considering cost cuts to ensure that we have sufficient funding for services. The police department, for example, is to be commended for implementing many of the recommendations included in the audit our office performed last year. This has led to greater efficiencies within the department, including the reduction of overtime expenditures. This will help to reduce the City’s projected budget deficit and potentially create some availability of revenue for the City during this budget year.

Any time you increase expenditures you must find a way to pay for it---either with increased revenues or by cutting other expenditures. In order to be in compliance with the City’s financial policies, we should identify the revenue or the budget cuts appropriate to fund these contracts. This way the Mayor and City Council can weigh the trade-offs and appropriately allocate the funds according to their priorities.
 

April 23, 2008

Long Beach City Auditor Supports Whistleblower Legislation

State Law Would Protect Individuals Who Report Fraud Against Local Governments

Long Beach City Auditor Laura Doud testified today before the California State Assembly Local Government Committee in support of AB 2001 (Swanson), commonly referred to as the “Whistleblower” legislation. This legislation would ensure anonymity for anyone reporting fraud or theft against municipalities.

After hearing of the support of all four of the California elected City Auditors, the Committee voted to pass the bill out of committee and on to the Assembly floor for consideration by the full Assembly.

“As a Certified Public Accountant and Certified Fraud Examiner, I know that fraud is a very serious problem that all local governments contend with and the City of Long Beach is no exception,” City Auditor Laura Doud told the Committee.

The Long Beach City Auditor’s office recently implemented a “Fraud Hotline” that allows anyone to report fraud or theft against the City. Research shows that nearly 50% of fraud that is detected is due to a “tip.” “We encourage all City employees, citizens, contractors and other interested parties to be alert and report any suspected fraud against the City,” stated City Auditor Laura Doud.

In Long Beach, the City Attorney believes that several sections of the Public Records Act currently protect the identities of whistleblowers who call the Fraud Hotline, such as provisions protecting personnel records and disclosures that are against the public interest. This legislation would make whistleblower protections explicit so that residents of all cities could rest assured that their identities would be confidential when calling their local fraud hotlines.

City Auditor Laura Doud was invited to testify before the Committee by Oakland City Auditor Courtney Ruby who has led the charge for this Whistleblower legislation in Sacramento. The Whistleblower legislation has gained significant support from others including City Controller/Auditor Laura Chick (Los Angeles), Ann-Marie Hogan (Berkeley), and the Association of Local Government Auditors.
 

April 16, 2008

City Auditor Laura Doud Says That Sea Festival is Generally Doing Well; However, Areas For Improvement Exist

City Auditor Laura Doud released an audit today that assesses the performance of the Sea Festival Association in fulfilling the City’s goals under the existing agreement between the City and the Association.
 

Click here for the Contract Performance Audit for the Long Beach Sea Festival

For over 50 years the City has hosted a series of summer community events along the waterfront known as Sea Festival. Prior to the Sea Festival Association becoming the operator in 2005, these events lacked public interest and financial support.

“Our audit found that overall Sea Festival is doing well and credit for this should go to the Sea Festival Association and City staff that worked very hard on this,” commented City Auditor Laura Doud. “However, the audit also found some areas that can be improved.”

The audit found that there are several issues that the City should address including: the collection of the 2006 Agreement Fee due to the City, the proper calculation of the Agreement Fee under the contract generally, and the use of City staff time to help coordinate and promote Sea Festival. Furthermore, there is ambiguity between the City and the Association about various requirements under the Agreement that should be resolved.

Three general categories were identified in the audit in which improvements can be made:
City’s Revenue and Expenses Related to Sea Festival; Policies and Procedures; and Contract Clarification.

Within the category of City’s Revenue and Expense the audit found that the Sea Festival Association had not paid the City the 2006 fee of approximately $37,000.

Findings in the categories of Policies and Procedures and Contract Clarification related to the tracking of city staff time, soliciting of sponsorships, and clarifying compliance with the intent of the contract and insurance requirements.

“We have requested that the City Council direct the City staff and the new operators of Sea Festival (International City Racing) to work together to resolve these issues, and I am confident they will,” stated the City Auditor. “I am pleased that our office has published this audit. It identifies issues that need to be addressed so that we can move forward with making Sea Festival as beneficial to the City as possible.”
 

April 14, 2008

“If You’re Going to Spend Your Tax Rebate, Do it in Long Beach!”
 

Suggests City Auditor Laura Doud Sales Tax Dollars Will Help City

On the eve of the April 15th tax deadline, Long Beach City Auditor Laura Doud suggested today that Long Beach residents who plan to spend a tax rebate or income tax refund, should spend in Long Beach and keep their tax dollars at home.

Earlier this year, Congress passed and President Bush signed an Economic Stimulus Package that will send U.S. Citizens up to $600 for individuals and $1,200 for couples. Checks will begin arriving in mailboxes in early May for those who qualify and file their tax returns by April 15th.

“Sales tax revenue is a huge portion of our City’s budget and I want to remind all our residents that Long Beach has great shopping and dining opportunities that the whole family can enjoy,” commented City Auditor Laura Doud. “Long Beach has so many fantastic places to go and things to do, I want to encourage our residents to take advantage of everything our City has to offer.”

For information on the many Long Beach retail opportunities go to the City Auditor’s Website www.CityAuditorLauraDoud.com and click on the link to “Shop, Dine and Tour Long Beach” and you will be connected to the Long Beach Convention and Visitors Bureau Website.

This effort to keep sales tax dollars in Long Beach is part of a concentrated effort by the Long Beach City Auditor to generate new revenue for the City to help balance a projected budget deficit facing the City next year.

“I am committed to identifying new and creative methods to bring revenue to our City to help reduce the deficit and prevent major budget cuts or tax increases. Keeping sales tax revenue in Long Beach through spending tax rebates and refunds here locally is just a part of this larger effort. I hope this will create new long term shopping habits for our residents that will allow people to enjoy our City as well as generate more sales tax revenue.”
 

January 29, 2008

City Auditor Laura Doud Addresses Budget Challenges

Long Beach City Auditor Laura Doud spoke to the City’s Budget Oversight Committee today to address the challenges the City faces in future budgets. She also commended the Long Beach Police Department for the progress made in implementing cost-saving and revenue-generating recommendations from a recent audit of the department.

“In his budget message for this fiscal year, former City Manager Jerry Miller cautioned that non-discretionary General Fund obligations were going up and that revenues to pay for them were either flat or going down,” commented City Auditor Laura Doud.

City Auditor Doud reported that in the six months since that message was delivered, the economic downturn has made our General Fund revenue condition even more uncertain. “With the State of California facing a $14 billion budget shortfall, the City of Long Beach will undoubtedly experience a reduction in state funding for local government programs. Additionally, due to the current slow down in the economy and the real estate market, we are seeing a decrease in revenue from sales taxes and real estate transfer fees.”

“We are not sure what the actual fiscal impacts will be but we must be prepared,” Doud told the Committee. “The greatest challenge will face us as we prepare for the 2010 budget year. We are not in a fiscal crisis today, but all of us should bring a sense of urgency to the mismatch between non-discretionary General Fund obligations on the one hand, and flat or potentially declining General Fund revenues on the other.”

On another budget related item, the City Auditor commended Police Chief Batts and the Department for working to implement the findings of last year’s audit of the Police Department by the City Auditor’s Office.

“Based on the report from the Chief, I believe we are reaching many of the savings and efficiencies identified in the audit,” noted City Auditor Doud.

Included in those are:

- A 40% decrease in overtime expenditures for the first quarter of this year compared to the first quarter last year –representing a reduction of nearly $1.2 million;
- An increase in false alarm fines – recently approved by the City Council. This will bring the City between $150,000 - $200,000 per year;
- Creation of a towing plan and using automated license plate readers. This is a variation of the audit’s booting recommendation to improve the City’s collection rate. An estimated 18,000 delinquent parking tickets can be collected resulting in approximately $1.5 million in new revenue to the City that is currently not being collected.

“I would like to thank Chief Batts and the Police Department for their hard work on implementing the recommendations of our audit and working to manage their budget,” Doud concluded.

Staff Contact: Olivia Silva Maiser, Director of Communications at 562.570.6434 or at Olivia_Maiser@longbeach.gov

January 8, 2008

Oil Revenues Increase Aiding Police and Fire

A Press Telegram article noted that Long Beach public safety is benefiting from an increase in the Oil Production Tax (OPT) which is paid by the oil producers and not the general public. The 25-cent per barrel oil tax increase was approved by 70% of voters in 2007. This new revenue is providing needed funding annually for our police and fire departments. The re-evaluated fee on crude oil produced within Long Beach was first suggested by City Auditor Laura Doud.

click here to download the article

Staff Contact: Olivia Silva Maiser, Director of Communications at 562.570.6434 or at Olivia_Maiser@longbeach.gov

October 11, 2007

Health Care Benefit Legislation Could Save Long Beach $14 Million

Long Beach City Auditor Laura Doud today commended Governor Arnold Schwarzenegger for signing AB 554 (Hernandez) to permit public agencies to reduce their retiree health care costs.

AB 554 permits all local agencies in the state to participate in the California Public Employees’ Retirement System (CalPERS) Pre-Funded Health Plan. Without this legislation, many jurisdictions, including Long Beach, were unable to participate in the Plan because Long Beach does not also participate in CalPERS’ health plan. This legislation removes that limitation.

“As a supporter from the beginning with Mayor Bob Foster, I congratulate Governor Schwarzenegger for bringing this unique investment strategy to reality,” Doud stated. “Assisting local governments by allowing them to participate in the investment strength of large and well-funded state funds, such as CalPERS, reduces future liability burdens, thus saving the taxpayers of Long Beach millions of dollars.”

Under the Pre-Funded Health Plan, CalPERS invests local contributions, much as it currently does for local agency and employee pension contributions. Interest earned on the investments is used to offset the local agency’s costs for meeting the health care obligations of its retirees, just as the interest earnings on CalPERS’ investments offset the pension obligations of its retirees.

“While in very good shape compared to other jurisdictions around the state, the City of Long Beach has an unfunded retiree health care liability approaching $90 million. That is not how much we owe today. That is the difference between our likely obligations over the next thirty years and how much money we will have to pay those obligations, if our annual budgeted payments continue at current levels,” Doud said.

If the City of Long Beach participates in the CalPERS pre-funding plan, it will potentially reduce its future unfunded liability by up to $14 million over the next 30 years.
 

“Pre-funding is absolutely the best option available to address long-term costs for retiree health care and other post-employment benefits. The Governor’s signature on this bill enables the City to take advantage of that option,” Doud stated.

Doud said she will initiate meetings with other City officials to determine how Long Beach can best benefit from the legislation starting in the next fiscal year. AB 554 takes effect on January 1, 2008.

Staff Contact: Olivia Silva Maiser, Director of Communications at 562.570.6434 or at Olivia_Maiser@longbeach.gov

August 29, 2007 - Editorial by Laura Doud, Long Beach City Auditor

Efficiencies Before Taxes

The City of Long Beach has come a long way in the last few years. It has dug itself out of a $102 million General Fund Deficit by eliminating 400 City positions without layoffs, removing 250 vehicles from fleet operations, and conducting and implementing optimization studies such as the Workers’ Compensation Study. All without raising taxes.

I am in full support of these types of initiatives to balance our budget. These are good initial steps and I encourage more efforts in this direction.

We must focus on making sure that the citizens of Long Beach are receiving the biggest return on their taxpayer dollars. We need to identify ways to maximize all revenue due to the City, including greater efficiencies in City spending.

Our City has tremendous revenue demands to support important city services, most notably public safety and infrastructure.

Our audit of the Police Department (the department with the greatest financial impact on the City’s budget) identified several efficiencies and cost savings. It also made several recommendations to use more civilians, contain overtime, and best use resources available to ensure the continued success of the Police Department. This will ultimately save the City millions of dollars. My office is working with City Management and the Police Department to determine a plan to implement these recommendations.

Our office is also analyzing street infrastructure needs and funding to identify better ways to get the results citizens deserve.

It is essential that we remain fiscally prudent and continue to work aggressively to find ways to create efficiencies and collect all revenue due to the City. Raising taxes is an option, but should be a last resort.

Staff Contact: Olivia Silva Maiser, Director of Communications at 562.570.6434 or at Olivia_Maiser@longbeach.gov

July 17, 2007 - Saving Money

City Auditor Presents Police Efficiency Study

City Auditor Laura Doud presented the Long Beach Police Efficiency Study to the Mayor and City Council. The audit focused on how funds can best be invested in public safety to help fulfill the Mayor's goal of 100 new officers.

Twelve initiatives were identified, which, if implemented, could result in significant savings in the general fund over the next several years. These initiatives looked at civilianization, redeployment, technology improvements and increased fine enforcement.

Click here to download the complete audit.

Staff Contact: Olivia Silva Maiser, Director of Communications at 562.570.6434 or at Olivia_Maiser@longbeach.gov

May 2, 2007

City Auditor On Passage Of Proposition H

Cites Teamwork, Voter Interest and Benefit to Public Safety as Key to Measure's Success

Frank Komin, President and General Manager of THUMS and Laura Doud

Long Beach City Auditor Laura Doud released the following statement on the passage of Proposition H, the Police and Fire Public Safety Oil Production  Act, passed at the May 1 special election:

Once again, community groups and voters in the City of Long Beach have joined together to pass a measure that will provide critical money to fund public safety programs here in the City. I am so pleased that Proposition H passed
yesterday and I am proud to have been part of the effort.

Moreover, it is most exciting to see how the project came together. It was
truly a team effort involving all interested parties – the oil producers,
business and community leaders, opinion leaders, media organizations and
members of our police and fire department organizations – who all joined
together to make sure this important measure was passed.

The task was not easy, nor was the realization that the measure would have to
pass by a two-thirds vote in order to become law. However, clearly the
citizens of Long Beach were listening, reading the literature and
understanding that the passage of Proposition H would mean more revenue for
police and fire at no cost to taxpayers. The measure passed with 70% of the
vote! Voters in this City realize that just by updating an out of date
ordinance the city, and most specifically public safety, will benefit by an
extra $3.8 million annually in new revenue!

Special recognition and thanks must be extended to Mayor Bob Foster, all of
the City Councilmembers and especially Councilmember Gary DeLong, the members of the Long Beach Firefighter's Association and the Long Beach Police
Officer's Association, the Long Beach Area Chamber of Commerce, and so many
others for their help in working so hard for the passage of Proposition H.

City Auditor Laura Doud noted that the passage of Proposition H was just the
most recent example of her commitment to promote excellence in government,
protect the public's interests and assets, and explore every possible angle to
discover new revenue to fund programs critical to the well-being of the City.

Staff Contact: Olivia Silva Maiser, Director of Communications at 562.570.6434 or at Olivia_Maiser@longbeach.gov

December 13, 2006

City Auditor Laura Doud Initiates Action Plan to Make Oil Production Tax Equitable

Neighboring Cities Charge as Much as Four Times More than Long Beach

Long Beach City Auditor Laura Doud released a memorandum today to Long Beach Mayor Bob Foster and members of the City Council highlighting the fact that the City’s Oil Production Tax (OPT) is well below the market rate and is a potential source of significant new revenue for the City.

The City Auditor’s Office has been working closely with the Mayor’s Office, Councilmember Gary DeLong and the Department of Financial Management in analyzing the City’s OPT. Long Beach, as is the case with other oil producing cities, mandates a set fee for “every person conducting, managing or carrying on the business of oil production from any well located in the city.”

However in the case of Long Beach, the OPT is nearly the lowest of all neighboring cities and despite the rise in oil prices it has not been increased since 1990. The City Auditor’s memorandum strongly recommends that the Mayor and City Council increase the OPT, which would potentially generate millions of dollars in new revenue annually to the City.

“As part of our continuing effort to identify and maximize revenue sources for the City, we have been looking closely at our Oil Production Tax which is much lower than other cities,” stated City Auditor Laura Doud. “In fact in Signal Hill the OPT is $.60 per barrel, which is four times the $.15 per barrel that Long Beach charges. This just doesn’t seem fair for Long Beach. We are committed to working with Councilmember DeLong and other stakeholders to determine a specific and equitable rate to recommend to the entire City Council in February for placement on the earliest possible ballot.”

A change in the City Ordinance to increase the OPT would require approval by the voters. Some of these findings and recommendations are based on an audit that was conducted by the City Auditor’s Office in September 2004; however, the recommendation to place the OPT on the ballot was never pursued.

Staff Contact: Olivia Silva Maiser, Director of Communications at 562.570.6434 or at Olivia_Maiser@longbeach.gov