The Long Beach City Council voted this week to hire a long-term financial consultant and postponed a vote on issuing a $400,000 bond to cover separation payments.
The council voted 4-1, with Councilman Scott Mandel dissenting, to hire Great Neck-based Capital Markets Advisors to a one-year $140,000 contract starting this month to advise the city on its finances and long-term recovery.
The city hired the firm for $20,000 to craft and offer guidance on the city’s budget presentation in May.
Acting City Manager Rob Agostisi said the firm has helped manage the city’s credit rating and bond refinancing.
“In a general sense, this will fill a hole that has existed here for a long time,” he said. “This is a long-term financial plan and fix for the city.”
Long Beach has had years of unbalanced budgets, and the influx of federal funds for projects after superstorm Sandy masked overspending. The council passed an 8.3 percent tax increase in the $95 million 2018-19 budget. The city also has been without a comptroller for more than a year.
“This is an important step for future planning to help the city be stable and allow us to prepare for the future,” council Vice President Chumi Diamond said.
Mandel, in voting against the contract, argued the city should review the firm’s work before committing to a long-term contract while the firm is already being paid.
“I do believe financial planning is the long-term goal. I just can’t bring myself to vote for them now, while they’re already on the job, being paid and a report is imminent,” Mandel said.
City council members also tabled a bond measure to pay $400,000 in outstanding retirement and separation pay to police officers, union workers and city management.
Mandel said he expects the bond to return for a vote after council members receive more information about the payouts.
“I’m looking forward to hearing the acting city manager’s rationale and reasoning why bonding is necessary,” he said.
The city issued $1.8 million in bonds in July to cover payouts, but more people retired than expected, Agostisi said.
“We still have time before we run out of money,” Agostisi said. “I believe we have time and we will find a solution.”