A tax hike, new fees and overtime cuts may carry Long Beach through the next fiscal year, but the city still faces long-term financial hurdles. And in the short term, departments may reduce services, including police patrols, officials said.
The City Council approved new fees as part of $400,000 in new revenue the city built into its $95 million 2018-19 budget as a way to bring down a tax increase that was first proposed at 12 percent. The council also shaved $526,000 in payroll to bring down the tax hike to 8.3 percent, equivalent to an annual increase of $276 per household.
Acting Long Beach City Manager Michael Tangney acknowledges this year’s budget in no way fixes the city’s fiscal troubles since it nearly declared bankruptcy in 2011, but this tax hike should even out the city’s finances for next year to give a realistic accounting of city expenses and revenue.
“It stabilizes the city going forward. You’re not spending money you don’t have. We have a budget that funds the city for the next year,” Tangney said. “We need to look at smart development and alternative revenue sources.”
One boost the city is counting on is the addition of parking meters in the next year. An increase in parking permits for municipal lots is expected to generate $40,000, officials said. The city says it will also no longer absorb costs related to special events, such as the Polar Bear Plunge, Long Island Pride and Irish Day. Reimbursements from event organizers are budgeted at $225,000. Foreclosure registry income from bank payments will bring in about $80,000, official said.
The budget trims more than $120,000 in overtime, including $60,000 for police, $26,500 for the city’s paid fire department and nearly $20,000 for beach maintenance overtime. The city also cut $126,000 in salaries for temporary recreation workers. Overtime costs have been a key contributor to the city’s history of unbalanced budgets and borrowing to cover expenses.
Tangney, who is also the police commissioner, said the department will have to run leaner and cut back on overtime on weekend quality-of-life patrols, special details and community events.
The paid 17-member fire department, along with 10 paramedics, works with the city’s volunteer firefighter force and will have to limit using overtime to backfill staffing, Professional Firefighters Union president Sam Pinto said.
“The fire department is operating at bare-bones staffing and utilizing overtime instead of having more personnel,” Pinto said. “We want to make sure there are no cuts to safety. I don’t know what the city has in store. It’s in their hands, but if they want to reduce overtime, we’ll see how that works.”
The City Council also cut $11,000 in raises for all management employees and eliminated a vacant $50,000 secretary to labor relations position. Corporation Counsel Rob Agostisi returned a $25,000 raise he was given as an incentive to stay with the city in exchange for moving the money toward outside consultants handling pending lawsuits against the city.
Councilwoman Anissa Moore said the council made cuts to maintain services without making major cuts to the workforce or part-time workers while righting the city’s finances moving forward.
“It lets the taxpayers know, from this point on, we’re going to keep a careful eye and make sure this doesn’t happen again,” Moore said, referring to the initially proposed double-digit tax increase.
City officials once touted a $24.2 million turnaround from the brink of bankruptcy, but the city’s financial collapse in 2011 was never addressed and was masked for the past six years with a false buoyancy of more than $102 million in disaster relief funds after superstorm Sandy.
The city was served last month with a $100 million lawsuit by Manhattan developer iStar Financial for the failed development of 522 oceanfront apartments along the boardwalk on the Superblock parcel. A damages trial is also slated this year after the city was found liable for up to $50 million related to a neighboring failed development on the boardwalk.
Long Beach still has a $2.1 million deficit after the city council failed to pass bonds last year to cover retirement and accrued time to current and former employees, including $108,000 to former City Manager Jack Schnirman.
City officials found about $500,000 in old bonds that were borrowed to cover part of the shortfall, but the remaining deficit has not been addressed.
“We still have a $2.1 million hole from the bond that wasn’t passed,” Tangney said. “If we don’t find a way to address that remaining $1.6 million, that may have to come out of our reserve fund and exacerbate our negative finances. We have to have long-term plans moving forward.”