State officials will analyze and make recommendations for Long Beach’s finances, that, if accepted, could make the city eligible for up to $5 million in state loans or grants.
The State Financial Restructuring Board for Local Governments approved Long Beach’s application for potential state aid in exchange for state-mandated changes the city would have to follow.
Long Beach city officials applied for the program at the suggestion of state Sen. Todd Kaminsky (D-Long Beach). The state board approved the city’s application, with the state comptroller’s office recusing because it is conducting a separate audit of the city’s finances and separation payments issued at the end of last year.
State officials said the city should look to expand revenue, streamline services and renegotiate some labor contracts.
“The vast majority of employees pay nothing toward the cost of health care. The city annually incurs more than $2 million in employee accrual payouts,” board secretary Tim Ryan said. "The challenges with Long Beach is going to be employee costs. I'm sure salary and benefit levels are high, and I'm sure that will have to be looked into and reported on. Not only do they have low employee health care sharing, but millions they pay each year in accruals and separation costs."
State officials also recommended that the city follow its 2015 plan to restructure its paid fire department by separating paid firefighters and paramedics.
City officials began restructuring the city's fire department in 2015 by laying off five grant-funded firefighters and conducting a $55,000 study of the operations. It recommended the city reduce its existing 17-member paid firefighter force to 12 and add 12 paid civilian paramedics.
The study recommended the city hire eight paramedics to staff three ambulances with paid and volunteer firefighters in rotating shifts.
The city's paid fire department reached a settlement with the city last year to protect its paid positions, who work in conjunction with the city's volunteer firefighters. Long Beach and Garden City are the only departments on Long Island with paid firefighters.
State officials said they did not support firefighters and paramedics working dual roles.
"The city knew this and said we can't have our fire people be paramedics. It costs too much," Ryan said."I think the board should replicate this in other areas so cities live within their means."
Long Beach officials passed a $95 million budget with an 8.3 percent tax hike last month in order to bridge a $4.5 million deficit. The city has operated on deficit financing with unbalanced budgets since 2012 after being downgraded close to junk bond status and on the brink of bankruptcy.
State board members noted the city council also failed to pass $2.1 million in bonds to pay for retirement and separation payments, as well as time-off accruals to about 15 active employees. City leaders averted the crisis, but said the $2.1 million gap threatened layoffs if the city was unable to meet June payroll.
“The city is eager and enthusiastic to get started on this process,” Long Beach Corporation Counsel Rob Agostisi said.