The Long Beach City Council has unanimously approved issuing $8.2 million in bonds to help pay off the rest of its $13.87 million deficit inherited from the previous administration.
The state in April authorized the city to issue as much as $12 million in bond deficit financing and required the state comptroller to review the city's budget for 10 years or as long as the bond is outstanding.
"It has been a long road to get here," City Manager Jack Schnirman said at the council's meeting Tuesday night. "As a result of the deficit financing, we have been able to remove the surcharge from the tax bill a year early to provide some relief to our taxpayers as they are recovering from Sandy."
As part of the $84.61 million operating budget for fiscal 2014-15, officials eliminated the yearly property tax surcharge of about $183 per household. The budget adopted last month stays within the state tax levy cap and reduces city property taxes by 1.2 percent. The city's current operating budget is $74.4 million.
Before the bond deficit financing was approved, Long Beach used cash flow borrowing that required the city to pay $400,000 in interest costs in the past two years, Schnirman said.
"Not having to pay those kinds of interest charges is really a win for the city," he said.
The City Council will hold a hearing on June 17 at 7 p.m. in City Hall to consider adopting a policy to establish a "rainy day fund." The city has budgeted $300,000 in contingency appropriations, but the city charter currently does not authorize it.
Council members will also hold a hearing that night to consider authorizing new fees for garbage and refuse, water and sewer, parking permits and bus fares. City officials have said they plan to raise additional revenue through increased rate charges.