Hundreds of residents and members of the city’s workforce packed Tuesday’s budget hearing and criticized a proposed 12.3 percent tax increase and potential layoffs, after officials recently said the city would be broke before the end of the current fiscal year on June 30.
Residents demanded answers at a meeting, which grew heated at times after city officials said that a tax increase is needed as part of a proposed $95 million budget for the 2018-19 fiscal year. If the spending plan is approved, taxes on the average home would rise by $400 a year.
“There was a very positive outlook given by the city manager, and unfortunately the projected revenues did not meet his projections, and the expenses overextend what he predicted,” Acting City Manager Mike Tangney told News 12, referring to former City Manager Jack Schnirman, now the county comptroller.
The council is weighing whether to exceed the 2.64 percent state tax-levy cap, and officials said the city needs to fill a $2.1 million funding gap through the end of the current fiscal year in order to make payroll.
At the meeting — the first of two hearings — Tangney cited a fiscal crisis that the Democratic administration inherited in 2012 “that hasn’t gone away,” as well as pending reimbursements from the Federal Emergency Management Agency and state for costs associated with Hurricane Sandy.
Public safety and employee benefits represent more than 45 percent of the budget, Tangney said, and the city is facing rising health care and pension costs, contractually obligated salary increases and legal judgments. The budget includes $830,000 in contractual raises for the Civil Service Employees Association, after the union received no raises last year.
Tangney added that only non-union management employees and new CSEA members pay a portion of their health care costs. He called on union employees to contribute to their health care, saying that without such concessions, layoffs and service cuts would be necessary.
“That is simply unsustainable,” Tangney said, adding that department heads will no longer be allowed to control their budgets.
Residents demanded answers, saying that several months ago, Schnirman and other officials had painted a rosy picture of the city’s finances, touting a $9 million reserve fund and a positive credit outlook by Moody’s Investors Service. The state comptroller’s office now says the city is in “significant fiscal stress.”
Residents also criticized the spending plan, which includes a number of non-contractual raises and fee increases. Residents shouted “No raises!” and a few also questioned why some non-union employees were being moved into union positions — which led to accusations of political patronage. Officials said the jobs already existed and were being filled.
“I don’t see where you feel you have the right to give out anything at this time, any raise,” Mary Volosevich, president of the North East Bay and Canal Civic Association, told the council. “You’re in a hole, and you have to dig yourself out.”
The budget was drafted before the council voted 3-2 on April 17 to reject a $2.1 million bond measure to make up for separation payouts made over the 2017-18 fiscal year for 57 police, firefighters, CSEA members and non-union management employees.
Council members John Bendo and Anissa Moore voted against the measure and questioned whether a number of management employees in particular — 15 of whom remain on the payroll — should have received the separation payments they recently did, including Schnirman, who left in January with a $108,000 payment.
Nassau County Legislator Denise Ford (R-Long Beach) and others called for an audit of the city by state Comptroller Tom DiNapoli’s office.
“This is a disgrace,” Ford said. “Has any information been given to justify the $108,000 that was given to Jack Schnirman, when everybody who takes a look at that payout cannot understand how it can be any more than $52,000? You cannot hide behind the seats you are sitting in.”
City Council President Anthony Eramo said that DiNapoli’s office is reviewing the city’s budget, and he said he asked the state comptroller to look into the payouts.
“We are seriously looking at it,” Eramo said. “There’s not one council member up here that was happy to find out about the way [the payouts] had been done.”
City officials said that without borrowing, the city would be broke before the proposed spending plan is voted on later this month, and that could result in layoffs and service cuts because the planned borrowing had been included as revenue in the 2017-18 budget. Most of the payouts, Eramo and others said, were contractual.
The rejection of the bond measure sparked an outcry by CSEA members, who protested any layoffs. CSEA President John Mooney led a walkout after he criticized Bendo and Moore for voting against the bond, saying that they had “turned their backs” on the union.
“We make up 55 percent of the workforce and account for 45 percent of the budget,” Mooney said, adding that the average salary of a CSEA worker is $50,000 a year. “You cannot balance the budget on the backs of us anymore! It’s not fair that the fiscal mismanagement of a select few who are no longer here fall on the back of the lowest-paid workers, who live check to check. This is retaliation, and it’s disgusting. The layoff of one is one too many.”
Moore shot back, saying that she voted against the bond because she believed the payouts to non-union employees were “improper.”
“You’re asking me to turn a blind eye to improper budget procedures?” Moore called out. “That’s irresponsible.”
Bendo added that there were questions about whether the bond measure itself was even legal. “There were a lot of hands in the cookie jar,” he said. “And now the cookie jar is empty.”
To make up for the $2.1 million funding gap, Tangney said that officials were able to come up with $1.2 million, in part through old bonds that had not been used for previous separation payouts. The city has also cut overtime, curtailed spending and does not intend to fill Schnirman’s job and other vacant positions until after the end of the fiscal year.
Still, the city is $900,000 short, Tangney said.
Some residents called on officials to demand that the recent payouts to non-union staff be given back.
City officials said that non-union employees account for only 1 percent of the budget, or 14 employees, who contribute to their health care costs and have offered to give up a week’s salary. Officials emphasized that the payouts could not be retracted.
“There’s 14 of them,” Eramo said, “so even if we eliminated every single one of them, you’re looking at a 10 percent tax increase.”
Another budget hearing is set for May 15.