Long Beach officials said Tuesday that the city is on the brink of declaring a fiscal emergency and will lay off 142 part-time workers this week. The city also imposed a hiring freeze that was effective at noon Monday and are planning to ask unions for concessions.
All nonessential part-time workers will be eliminated by the end of day Wednesday. Those employees were generally assigned to the city’s recreation center, Magnolia senior center and child day care center and youth and family services.
Officials said the fiscal crisis was caused by years of fiscal mismanagement and has been further exacerbated by the COVID-19 pandemic.
“We knew coming in that the city’s finances were a mess, but it’s even worse than we imagined,” said Long Beach City Council president John Bendo, who was elected in 2018. “Prior administrations have been kicking the can down the road for years. We’re now at the end of that road. These are difficult and painful decision we’re having to make, but we don’t have a choice. The pandemic has made an awful situation even worse.”
City leaders planned to begin negotiations with the city’s bargaining units, including the CSEA, Long Beach police and the city’s paid fire department to ask for concessions. Additional “workforce adjustments” are expected in the near future, officials said.
“Nothing is off the table,” city spokesman John McNally said.
Union officials could not be reached for comment Tuesday.
The city may ask full-time staff to backfill part-time workers, many of whom have been paid while at home during the pandemic, but unable to do their jobs. Officials may realign or reevaluate the workforce once facilities reopen.
The city has a $6.5 million deficit forecast for the 2020-2021 fiscal year and a year-to-date $8.3 million deficit this year partly caused by expenses and loss of revenue from the global pandemic.
Officials said the city has seen a nearly $25 million swing in its general fund balances, erasing a $9 million surplus in 2014 to a $14.6 million deficit as of March 31.
Long Beach budgets have seen operational deficits ranging from $800,000 to an $7.8 million deficit last year. The city has faced two straight years of 8% tax hikes. The proposed 2020-2021 budget is due to council members Friday, which must be passed or go into effect by default by May 31.
Previous budgets repeatedly forecast incoming revenue of up to $85 million, but revenue never exceeded $77 million.
“The city has been in denial about its finances,” interim City Manager Donna Gayden said. “I was hired to work with the council to get the city back on a path toward fiscal solvency.”
Officials will also examine other departments and management department heads. The city is still looking to hire a corporation counsel for a vacancy in the city attorney’s office and recently filled other mabendnagement positions. Gayden was hired in February to a prorated six-month $178,000 contract, and McNally was hired as her assistant for $110,000 to replace a previous position.