Long Beach OKs $190,000 one-year contract for city manager 

The Long Beach City Council approved a $190,000 one-year contract for City Manager Donna Gayden, a move council members say is a vote of confidence that she will improve the city's economic footing.

Gayden, who was recruited in February from Illinois to serve as interim city manager, initially signed a six-month $178,000 contract. Her new contract includes a 6.5% raise starting Sept. 1.

“The council is very happy with her performance and we asked her to stay on,” council president John Bendo said. "She is being given a raise because it is talent we are trying to retain." 

Gayden will also be added to the city health insurance. Bendo said she has not received any stipends for housing or moving expenses. 

She is the fourth city manager in two years since the last permanent city manager Jack Schnirman was elected Nassau County comptroller.

Moody’s Credit Agency this month maintained the city’s credit rating of Baa2 with a negative outlook, citing “consistent turnover at the highest levels of city management,” and said stabilizing management and increasing reserves will be a key factor in future credit ratings.

"We get some certainty for the next year and a professional city manager, not a political employee,” Bendo said.

Gayden said she has a background in finance and turning around troubled communities. She initially expected a downgrade by Moody’s, but said slight fiscal improvements and having a stable management team kept the rating stable.

“When I take a job, I try to help communities, and when I leave a community I want to make sure I have an impact,” Gayden said. “COVID has slowed us down from what I can do, but we’re moving forward, and I will be staying another year.”

City officials said they plan to reduce expenses to balance the budget as needed, but have not planned any additional spending cuts.

Gayden follows former Police Commissioner Michael Tangney, who also served as interim city manager for more than a year at his $233,000 salary, former Corporation Counsel Rob Agostisi, who served for eight months at a $176,000 salary, and Public Works Director John Mirando, who was paid a salary of about $174,000 for five months.

Moody’s also said in its rating that the city’s reserves have declined the past two years because of unbalanced budgets and failure to hit revenue targets. City officials projected the 2020 fiscal year that ended in June will have positive returns, and the 2020-21 budget will include a slight increase in reserves of $150,000.

“The coronavirus crisis is not a key driver of this rating action, but could affect the city throughout the rest of 2021,” Moody’s warned.

The city expects to lose $1 million in beach fees this summer and anticipates the state will withhold 20% of municipal aid because of the state budget crisis. In Long Beach, that's equivalent to $600,000. 

Moody’s said city management continues to issue debt to pay for operating expenses such as separation pay. City officials said they cannot afford to budget for separation pay without massive tax increases or layoffs.

The city plans to vote Sept. 1 to bond for $2.7 million in separation pay to retiring and departing employees.

Taxes have increased by 20% over the past three years, and 164 part-time and full-time workers were laid off in April to close the deficit.

By John Asbury

john.asbury@newsday.comJohnAsbury

John Asbury is a breaking news and general assignment reporter. He has been with Newsday since 2014 and previously worked at The Press-Enterprise in Riverside, California.