Long Beach City Council approves $93.5 million budget

Spending plan stays within state cap but hikes taxes; council OK’s capital plan

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The City Council voted unanimously on May 16 to approve a $93.5 million budget for fiscal 2017-18, a spending plan that stays within the 1.26 percent tax cap and includes an average property tax increase of $56.

City officials touted the spending plan as its sixth consecutive balanced budget, and took another look at water and sewer fees that were initially set to increase by 2 percent under an earlier proposal and would have cost homeowners $26 and $60, respectively.

City Councilman Scott Mandel had asked the administration to reconsider those fees, which were subsequently reduced to 1 percent and will save the average home $18, officials said.


City Manager Jack Schnirman, a Democrat who is running for Nassau County comptroller, cited a $14.7 million deficit the administration inherited upon taking office in 2012 — followed by Hurricane Sandy — and noted improved financial controls that led to a turnaround of the city’s reserve fund and credit rating upgrades from Moody’s Investors Service that he said is saving taxpayers more than $200,000 in debt-related interest costs.

Schnirman noted that the reserve fund is now at $9.4 million and the proposed spending plan does not include significant service cuts or expansions.

“We have a cost-to-continue budget, where we reduced requested budget expenditures by $2 million, and we have merged our fiscal and physical recovery, which has generated $7.2 million back to the city’s rainy day fund to date,” Schnirman said.

Schnirman also said that recovery work done “in-house” by members of the Civil Service Employees Association after Sandy resulted in a transfer of $1 million from its Federal Emergency Management Agency fund to the general fund in order “to provide tax relief this year.”

The budget includes a 1 percent raise for management employees, who Schnirman said continue to contribute 10 percent to their health care costs. And though contractual salary raises increased by $228,000, officials said that the recent eight-year contract agreement that the city reached with the CSEA will net the city $400,000 in cost-savings in contractual salary raises.

Health care costs are also up $1 million while retirement and pension costs have spiked by $350,500. The city said that the New York State Retirement System has recently made changes “that will provide a stable projection of the city’s annual pension costs going forward, and the proposed budget reflects $190,000 in savings.”

At last week’s meeting, members of the council and some residents lauded the spending plan, which takes effect on July 1.

“This has been a very difficult task, to stay within the tax cap that we’ve been challenged to do,” City Council President Len Torres said. “We’ve been able to do that and still continue to move forward with the … recovery of our city.”

Mandel said the budget “strikes a balance between rising costs and services.”

In a review of the budget earlier this month, state Comptroller Tom DiNapoli, a Democrat who recently endorsed Schnirman, said, “Significant revenue and expenditure projections in the proposed budget are reasonable.”

DiNapoli’s office, however, noted a few areas of concern, mainly overtime that was budgeted at $2.7 million in the proposed spending plan.

“Overtime costs have averaged approximately $3 million in each of the last five completed fiscal years,” DiNapoli’s office wrote in its review. “Although the city has improved its projections for overtime costs in certain departments, based on the trends, it does not appear that the total proposed appropriation will be sufficient.”

Council Vice President Anthony Eramo asked the administration what controls had been implemented to bring overtime projections in line.

City Comptroller Kristie Hansen-Hightower said that the administration looked at a “more realistic budget” for the coming fiscal year and that each department was tasked with requesting overtime in advance. She added that members of the city’s paid fire department agreed to cap overtime, among other controls.

Bill Dodge, president of the Commanding Officers Association, the union representing those who hold command positions in the Long Beach Police Department, said the city has yet to reach contract agreements with the COA, the Patrolmen’s Benevolent Association and Long Beach Professional Firefighters Local 287.

“The budget that you’re presenting right now doesn’t include any provisions for the COA, which is without a contract for nine years, a PBA that’s been without contract for two years, and a Fire Department that’s without a contract for seven years,” Dodge told the council. “That’s 18 years of pending contracts. We are going to have the next administration saying, ‘That’s the previous administration’s deficit.’”

Council approves capital plan

The council also approved a $14.9 million bond initiative as part of its five-year capital plan for fiscal 2017-18 that includes projects ranging from road and building improvements to sewage, drainage and public safety upgrades. The city is expected to receive $5.5 million in state and federal grants associated with the plan. The city also approved a $6.8 million tax anticipation note to cover remaining costs associated with Sandy.

But some residents raised concerns about what they described as excessive borrowing.

“They have doubled the city's debt,” said John Bendo, president of the West End Neighbors Civic Association. “Where the current administration continues to criticize the previous one for spending down the city's rainy day fund, are they creating a debt crisis for future councils by borrowing so much money?”

In February, Moody’s maintained its Baa1 rating on the city's $113 million in outstanding general obligation debt and again issued a positive outlook. Moody’s added that the city has “an elevated but manageable debt burden,” but noted that it could increase based on the outcome of any litigation.

Hansen-Hightower said the city’s debt burden is currently only 11 percent of the city’s total operating budget, “Which is very low compared to other municipalities and very low compared to Moody’s analysts’ trends.”