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Long Beach votes to seek $5M in state aid, oversight for finances

Long Beach residents express concerns over a proposed tax hike during a Long Beach City Council budget hearing on Tuesday at City Hall. (Credit: Newsday / Yeong-Ung Yang)

Long Beach officials could receive up to $5 million in state grants and loans to help the city’s fiscal recovery, if the state agrees to review its finances.

The City Council voted unanimously Tuesday night to apply to the state Financial Restructuring Board for Local Governments, which could grant aid in exchange for state-mandated reforms.

Sen. Todd Kaminsky (D-Long Beach) had referred the city to the program, as the council considers raising taxes by 12.3 percent to plug a $4.5 million deficit.

“Should Long Beach apply . . . and gain acceptance, the program would be responsible for conducting a comprehensive review of the city’s finances, management practices and economic conditions,” Kaminsky said in an April 30 letter to acting City Manager Michael Tangney.

The state board meets in May to consider applications and takes three to four months to approve municipalities for review and financial aid.

“Importantly, once the review is completed, the FRB [Financial Restructuring Board] will make recommendations to the city that it must comply with as to how to improve its fiscal stability, management and delivery of public services,” Kaminksy wrote.

The council also voted Tuesday night to exceed a 2.65 percent tax cap.

During the heated meeting, during which the council held a second public hearing on its proposed $95 million budget, residents continued to pepper city officials regarding retirement payouts to current and former employees. Some council members and officials called for stronger constraints on the city’s finances to follow city code and make sure the city management was held accountable to follow the budget.

Tangney told residents the most costly items included in the budget were city-operated daycare, employee health care contributions, the paid fire department and police force, and special events like summer concerts and beach events.

Officials said each event hosted by the city costs between $20,000 and $50,000, including overtime.

To help lower the proposed tax hike, city officials said they are considering adding metered parking, exploring branding sponsorships on some city facilities, adding solar panels and increasing development.

The council did not vote on the budget Tuesday night. Members must schedule a special meeting to vote on it by May 30.

If the council cannot reach a majority vote, the city charter says the proposed budget — and the 12 percent tax increase — will become set for the next fiscal year, which begins July 1.

Tangney said the costs of salaries and benefits account for nearly half of the proposed 2018-19 budget. He also cited rising costs for city services and infrastructure improvements after superstorm Sandy that either were not covered or the city hasnot been reimbursed for.

The city is awaiting $7 million in reimbursements and has $30 million in projects already underway which will be bonded while the city awaits reimbursements from the Federal Emergency Management Agency.

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