58° Good Morning
58° Good Morning
Long IslandNassau

State comptroller upgrades Long Beach's financial status

New York State Comptroller Thomas DiNapoli upgraded Long Beach's financial status last week to a category called moderate fiscal stress.

The city had been listed by the state for the past two years under the category of significant fiscal stress while recovering from a nearly $15 million deficit.

The comptroller's report found the city had a moderate fiscal stress score of 57.5 percent in 2014, compared with significant fiscal stress levels of 80 percent in 2013 and 95 percent in 2012.

Those scores are computed based on the city's year-end fund balance, short-term borrowing, operating deficits and overall fiscal health of the city. Those areas are converted into percentages.

Long Beach faced a $14.8 million deficit at the end of 2011 and had its bond rating drop five levels to Baa3, one step above junk bond status, after spending a $107,000 surplus.

Moody's Investors Service upgraded the city's bond rating to Baa2 in February, citing fiscal improvements as the city sold $6.5 million in public improvement bonds to ease its long-term debt.

"This is good news that we're moving in the right direction," Long Beach City Manager Jack Schnirman said. "The rating is an important tool. Had it been in place in the years preceding our taking office, it may have been a warning signal that something was wrong in Long Beach."

The comptroller's report considered the past three year's ratings and also noted reduced short-term debt and the city's financial recovery, Schnirman said.

The city borrowed $25 million in short-term debt in September for superstorm Sandy rehabilitation projects, which are expected to be reimbursed by the Federal Emergency Management Agency. The city has no outstanding budget notes, Schnirman said.

Moody's cited $66 million in outstanding general obligation debt in February.

City officials said they have stabilized Long Beach's finances by doing many Sandy-related projects through internal public works plans. The city has gradually been reducing debt and working to build reserves during the past three years, Schnirman said.

The city is working on a $84.6 million balanced budget through June. A budget hearing is scheduled for May 5.

Nassau top stories