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Long Beach council OKs bond sale to cover revenue loss due to coronavirus

The City of Long Beach seal in City

The City of Long Beach seal in City Hall. Credit: Newsday/Thomas A. Ferrara

Long Beach City Council members passed a $4.25 million deficit bond to make payroll for the next two months and fund lost revenue during the COVID-19 pandemic.

The city is projecting the $4.2 million shortage through the end of its fiscal year, which ends June 30. The city has enough cash on hand to make the next two rounds of payroll through May.

The shortage includes $1.5 million in lost beach pass revenue and recreation activities, $800,000 shortages in sales tax and state aid, $250,000 in licensing and permit fees and $100,000 in LIRR commuter parking passes.

Council members unanimously passed the bond during a special meeting Thursday night.

“When we get to the latter part of the year, what carries the city through is beach pass sales and sales for parking passes for the LIRR station,” Long Beach City Council President John Bendo said. “Because of COVID-19, we don’t know if those revenues are going to come in. We’re basically hedging here assuming that money is not coming in and we need that revenue to carry the city through the end of the year.”

The bond, which was sold to Capital One with 2.25% interest totaling about $96,000, must be repaid by the end of June 2021. A tax increase to pay for the bond would raise taxes by 10 percent.

Long Beach already is proposing a 1.8% tax levy, equal to a 3.84 percent homestead tax, which would add $142 to the average household in its 2021 budget. The city also laid off two dozen management and union employees and 142 part-time, all nonessential employees who worked at various departments, including the recreation center and youth and family services.

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The city could also pursue deficit financing, which must be approved through state legislation and the state comptroller, to finance the bond over 10 years. The city has been under a 10-year deficit financing plan since 2013 when the city asked the State Senate to fund up to $12 million to cover the city’s prior deficit.

Long Beach generally counts on $4.4 million in beach revenue each year, with beach passes sold from Memorial Day to Labor Day. The city closed its beachside boardwalk in March and has not announced when beach passes and lifeguards will resume this summer. The beach remains unrestricted at several points off the boardwalk.

City officials said they are working on a contingency plan for 2021 fiscal operations and seeking federal aid from Congress through Rep. Kathleen Rice (D-Garden City).

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