Two months after Gov. Andrew Cuomo approved a $12 million borrowing measure to help Long Beach cover costs associated with Hurricane Sandy and a multi-million-dollar deficit that led officials to declare a fiscal crisis two years ago, the city is looking to issue $8.2 million in serial bonds to cover the remainder of that “inherited” deficit.
The bill signed by Cuomo gives the city the ability to issue up to $12 million in serial bonds, to be paid over 10 years, to finance “extraordinary” Sandy-related costs that are not eligible for reimbursement by the federal or state government, and to liquidate deficits in its general, sewer, water and risk-management funds from fiscal 2011-12.
The City Council will consider the measure at a public hearing on June 3.
For two years, the city had been paying down the deficit by way of a surcharge that appeared on residents’ tax bills in 2012. City Manager Jack Schnirman said that the city managed to cut taxes for fiscal 2014-15 thanks to the borrowing measure, and that it would allow the city to eliminate the three-year surcharge a year early.
Earlier this month, officials said that the value of the bonds had yet to be determined, and that they were unlikely to be used for costs associated with Sandy that are not covered by the Federal Emergency Management Agency.
The bond measure means that the state comptroller’s office will conduct annual reviews of the city’s finances over the next decade or so, beginning with the 2014-15 budget. Schnirman had said that the state comptroller would certify the city’s deficit — ultimately determined to be $14 million for fiscal 2011-12 — and conduct “mini audits” annually.
“As part of the deficit financing … they will do a review of our budget on an annual basis,” he said.
City officials touted the $84.6 million budget the City Council approved on May 20 as the administration’s third consecutive balanced budget, and the second that stayed within the state tax cap. It includes a 1.2 percent property tax cut, lowering taxes on the average home by nearly $35.