State Assemblywoman Missy Miller and Nassau County Legislator Denise Ford called on state Comptroller Tom DiNapoli last week to audit Long Beach after two City Council members questioned separation payouts made to non-union employees, a number of whom still work for the city.
On April 17, the council rejected, by a 3-2 vote, a proposal to bond $2.1 million to make up for separation payouts that city officials said were owed to police officers, firefighters, Civil Service Employees Association members, and exempt, or non-union, employees — for accrued vacation and sick leave, retirement incentives and “other financial commitments and obligations” — during the 2017-18 fiscal year.
Long Beach officials said that without bonding, the city would be broke before next year’s budget is voted on in May, and that could potentially lead to layoffs and a government shutdown because the planned borrowing had been included as revenue in the 2017-18 budget. The city announced last week that weekend bus service had been suspended, effective immediately, because of the failure to pass the bond.
On Monday, State Sen. Todd Kaminsky, a Democrat from Long Beach, said news of the city’s “dire” fiscal condition and the payouts to certain employees was “troubling.” He added that he had received assurances from DiNapoli’s office that “they will ask all necessary questions to get to the bottom of what has happened,” as part of an annual review of the city’s budget.
Council members John Bendo and Anissa Moore were critcized by the majority on the council, as well as the CSEA president, for voting against the bond measure, which required four of five votes to pass. Bendo and Moore questioned payouts that were made to exempt employees, including Jack Schnirman, the former city manager who is now county comptroller. He received a $108,000 payout in December before he began his term as comptroller on Jan. 1.
Bendo said a list of the 57 employees who received the separation payments included a number of exempt employees who received “sizable” payouts but are still working. Fifteen employees on the list still work for the city, one person with knowledge of the payouts told the Herald, including a number of union employees.
Bendo said that some, including Schnirman, may not have been entitled to the payments because the charter states that exempt employees cannot accrue more than 50 days of vacation time and can only be paid 30 percent of total accrued sick days at the time of separation. Bendo said that based on his calculations, for the time Schnirman served as city manager since 2012, he was entitled to only $52,000.
In her letter, Ford (R-Long Beach) noted how DiNapoli’s office recently re-categorized the city’s level of fiscal stress from “moderate” to “significant,” the highest level under DiNapoli’s Fiscal Stress Monitoring System. DiNapoli’s office cited short-term borrowing, a deteriorating fund balance and increased operating deficits for fiscal year 2017.
“The cause of this crisis is due directly to the financial mismanagement of former City Manager Jack Schnirman and his administration,” Ford wrote. “I am concerned that perhaps your office has been habitually misled as to the true financial condition of the City of Long Beach.”
“Additional attention should also be paid to whether your office has received honest and accurate financial information from … Schnirman,” she added.
Schnirman said that the bond measure was “routine” and that separation payouts had been decreasing "as planned" over the years. He criticized Bendo and Moore for voting against it, saying that the city now “finds itself in the middle of an unnecessarily manufactured cash crisis.”
“The earned leave obligation policy was applied evenly across the board for a number of years with the advice of then-corporation counsel,” Schnirman said in a statement, adding that DiNapoli’s office conducts a review of the city budget each year as part of a deficit-financing measure approved in 2014.
“The city already receives an annual budget review from the [state comptroller] as a result of it being near bankruptcy in 2011,” he said. “We are surprised that Legislator Ford would choose to get involved now after she remained largely silent during what was truly an unprecedented, inherited fiscal crisis in 2012.”
‘Whatever the city manager decides’
Schnirman did not immediately return a request for comment to elaborate on how the payouts were calculated.
Acting City Manager Mike Tangney said that the exempt employees on the list earned that time. He added that at times, the city manager has discretion and has allowed employees to “cash in” throughout the year for sick or personal leave, compensatory time or hardship exemptions.
“The practice has been, whatever the city manager decides at the time,” Tangney said, adding that making the payments over time, rather than issuing them as a lump sum, can save the city money.
“I was under the impression that the city was doing well, and there might be some financial reason for [Schnirman] to do this and reduce the city’s debt,” he continued. “The issue here, unfortunately, is the house is on fire, and we’re worried about where the smoke alarms were placed. Let’s worry about the fire and fix the problem. This exempt argument is political fodder that I’m not going to play with.”
According to the city, exempt employees account for less than 1 percent of the city’s workforce and pay a portion of their healthcare costs. Those with knowledge of the list said the payments were made to exempt staff in the administration — a number of them supporters or members of the local Democratic club — who had intended to leave for positions elsewhere or were uncertain about their jobs with the city after the November elections.
The list, which was obtained by the Herald on April 19, showed that a number of exempt employees received total or partial payments, including Corporation Counsel Rob Agostisi, who has worked for the city for about 11 years and received $128,000, and Tangney, who is also the city's police commissioner and was paid $52,000.
Others who remain employed with the city include Deputy City Manager Michael Robinson, who received $35,000, while the city’s director of economic development, Patricia Bourne, received $25,740.
Others, such as former city comptroller Kristie-Hansen Hightower, received $61,915 when she left last year, while former Department of Public Works Commissioner Jim LaCarrubba — who resigned in 2016 but continued to serve as a part-time consultant to the city to assist Hurricane Sandy recovery efforts — was paid $20,967.
Shari James, the city’s former acting comptroller, received $44,000, and now works with Schnirman at the county.
Most of the payouts were made to police, firefighters and members of the CSEA including police officers Michael Langlois, who received $162,843 and officer Bruce Azueta, who was paid $156,000, both of whom retired after about 30 years on the force.
Those with knowledge of the CSEA payouts said they were contractual but also included a number of retirement incentives. Others said that provisions included in collective bargaining agreements for police and firefighters allow members to cash in a portion of accumulated time while still employed.
“What the city charter does not address is exempt employees that stay in the city‘s employ cashing out accumulated time before retiring,” Bendo said. “Additionally, a rough calculation of the list does not corroborate some of the numbers on the list for the exempts.”