Long Beach facing $10 million deficit

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“Unfortunately, that has been the case for a period of years,” Schnirman said, adding that more than 80 percent of the projected budget shortfall is in the city’s general fund, the largest part of the budget. “This deficit is systemic across all of the city’s funds. It can’t be pinned on any one revenue not coming in — it’s simply improper, unbalanced budgeting across the budget. If we keep going in this direction — which obviously we won’t — the city’s deficit will approach $20 million by 2015. That’s what happens if we do nothing.”

City to initiate a ‘corrective action plan’

To date, Schnirman said that his office has reduced overtime costs by more than 72 percent and is spending $252,000 less per year on management salaries, among other cost-saving initiatives.

“Those expenses that are within an administration’s control, we are controlling and curtailing, and that’s something we are very proud of so far,” he said.

Schnirman said that the next step is to move forward with “a corrective action plan” that will be worked on jointly by the council, union leaders and residents. Schnirman and council members did not offer specifics on what cost-savings measures would be initiated to eliminate the deficit, other than to say that the administration would work with union leaders and department heads to set savings goals in each department.

Schnirman said that the city would not be forced to declare bankruptcy, but acknowledged that the administration may look into short-term borrowing measures — such as a revenue anticipation note — for cash-flow purposes, though he said such a move was not a solution.

“We’re not actually ready to get into that — at some point before the close of the fiscal year I would imagine that would be an option,” he said. “What we’re going to do is go through a thoughtful process now, where we divide the deficit between expenses and revenues, set savings targets on the expenditure side and bring all of our labor partners to the table and have a conversation with them about how we meet those targets.”

Schnirman and council members said that they are looking to avoid union layoffs and tax increases.

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