Audit: Long Beach's cash reserves small

Long Beach's financial situation might be even bleaker than the city's new administration thought.

An independent audit to be made public Monday shows the city ended the 2010-2011 fiscal year on June 30 with about $107,000 in available cash -- 0.2 percent of its overall budget, according to new city comptroller Jeff Nogid.

Municipalities are recommended to have 5 to 10 percent of their budgets reserved as available funds at the end of a fiscal year, Nogid said.

"The status of the city's fund balances are completely depleted, which means that the city going into this year had no cushion for error and was immediately in the red," said City Manager Jack Schnirman, adding that "decisions going forward will be even more difficult."

The audit commissioned by the city also shows that a combination of untracked spending, overestimated revenues and underestimated expenses bled Long Beach's available funds from about $7.4 million in 2008 to $107,000 three years later.

"They drew down their savings account," Nogid said of the previous city administration

The city also stopped tracking records for costs associated with big-ticket projects such as building and playground renovations, according to the audit.

"This is the confirmation of what I've been telling the citizens for the last two years," said second-term Democratic Councilman Michael Fagen, who said the administration of former City Council President Thomas Sofield Jr. "was completely out of control and had total disregard for the taxpayer's money."

Sofield, who ran as a Republican, could not be reached for comment.

The audit is to be posted on the city's website Monday. Schnirman and the five-member council plan to discuss details of the audit at Tuesday's City Council meeting. Schnirman said the auditors will present their findings and the council will take questions from the audience.

The council will also vote on a resolution to declare a fiscal emergency for the city. The resolution is expected to pass, Schnirman said. It was tabled at the Jan. 17 meeting after council members said they wanted a chance to meet with union representatives before taking action.

The resolution would give Schnirman authority to further tighten and veto spending, even for items already in the budget.

Tuesday's meeting starts at 7 p.m. on the sixth floor of City Hall, 1 West Chester Street.