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Long Beach City Council votes to borrow $1.8M to pay city retirees

Nassau County Legis. Denise Ford (R-Long Beach) and Long Beach City Councilman John Bendo spoke at a rally Tuesday to protest separation payments for current and former city employees who have retired or may leave in the next year. (Credit: Newsday / John Asbury)

The Long Beach City Council has approved borrowing $1.8 million to cover retirement and separation payments for city workers who have retired or may leave in the next year.

Council members voted unanimously on the payments after a heated meeting Tuesday night where residents protested borrowing the funds and renewed the argument against separation payments for accrued vacation and sick time.

The City Council voted to lower the original bond measure from $2.5 million to cover retirement payments later in the year, to the $1.8 million that was previously approved in a unanimous vote on the new fiscal year's budget. The City Council approved the budget with the $1.8 million in bonds included in anticipation of contractual payments to the city’s CSEA union and police and fire department retirees.

City officials said they have about $1.3 million in current obligations for the next year in previously agreed-upon retirement payments that are made in installments over three years. 

The bond resolution was passed in lieu of a 6 percent tax increase.

Officials said the payments are not being made to any management or active employees still working for the city. City Council vice president Chumi Diamond added an amendment to require that any payments made using the bond funds only go to ex-employees who have left the city.

“Bonding is not something any of us like to do, but we recognize these are employees who gave service to the city for many years,” Diamond said. “To turn our backs on them now would not be fair.”

The bond resolution is separate from a failed $2.1 million bond measure that council members rejected in April to cover payments already made to more than 50 employees, including 15 management workers and former City Manager Jack Schnirman.

The city covered part of the subsequent shortfall with about $1 million in a previously approved bond last year, but had warned the shortfall would be carried over into this year’s budget, which took effect Sunday.

Residents held a rally before the City Council’s vote to protest the separation payments and request an investigation into the city's finances.

Nassau Legis. Denise Ford (R-Long Beach) called on District Attorney Madeline Singas and the U.S. Attorney for the Eastern District of New York or the FBI to investigate the payments' legality.

“We welcome the FBI because everyone seems to be doing a cover-up,” Ford said.

In a June 26 letter responding to Ford's request for an investigation, Singas said her office would review and investigate any findings from an audit underway by the state comptroller’s office.

City officials said they have turned over seven years worth of financial records and previous payouts to the state comptroller’s office in Hauppauge. Long Beach officials said the comptroller’s audit would take six to nine months to complete.