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Overcast Long Beach City Council meeting gets heated
Tempers flare as city allocates emergency funds to cover cash-flow gap, retirement payouts
A special City Council meeting on Saturday grew heated amid a discussion over the state of the city’s finances, before the council passed a resolution to allocate money recently acquired through a borrowing measure to cover a cash-flow shortfall — and to make sure employees receive their paychecks in time for the holidays.
The resolution, authorizing a budget amendment to the general fund for the 2011-12 fiscal year, passed by a 3-1 majority vote. Democratic Councilman Len Torres was not present.
The meeting followed an emergency council meeting in November at which two resolutions were passed, one authorizing the city to borrow a $1.75 million tax anticipation note in order to pay its workers in time for Christmas, and another authorizing a $2.5 million budget note that would allow the city to meet its contractual obligations to pay outgoing police officials and other retirees amid a cash-flow shortage, which city officials attributed to “unforeseen” costs associated with Tropical Storm Irene and other factors.
The measure came on the heels of a Nov. 18 memo by City Comptroller Sandra Clarson, who said that the city has $3.9 million in cash in its operating bank accounts but was $1.3 million short of its Dec. 23 payroll.
The approval of Saturday’s resolution allowed the city to meet its payroll and terminal salary obligations, by allowing the money the city has received to be earmarked to cover the appropriate shortfall lines.
“We have closed on those bonds and those funds have been transferred to our bank accounts,” City Manager Charles Theofan said.
While the passage of the budget note resolution in November authorized the city to borrow up to $2.5 million, currently, $1.5 million would allow the city to meet its termination payouts for a number of retirees and police officials, including the police commissioner. City officials said that the resolution allowed the city to borrow more as a contingency, in the event that more police officials resigned in the weeks leading up to a new Democratic administration.
