Long Beach City Council race heats up

Civic groups to hold candidates forum on Oct. 16

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The Republican slate of candidates running for three seats on the City Council this year is calling for a complete audit of the city’s finances, saying that the administration has not been forthcoming about Long Beach’s financial condition and has borrowed excessively.

In an interview with Herald editors last week, William Haas and Chris Jones, both Republicans, and Leah Tozer, a Democrat, said that it was time for a change at City Hall, and they would attempt to persuade voters at a candidates forum on Oct. 16 that the administration has not been honest with the public, and has raised taxes and fees, put political interests first and more than doubled the city’s debt over the past five years.

“No one really seems to be advocating for Long Beach,” said Tozer, a real estate broker who sits on the Chamber of Commerce’s executive board. “The three of us are finally taking it back to the people.”

In a city where Democrats outnumber Republicans 3 to 1, the GOP slate is looking to grab three seats in November that are now held by Democratic incumbents Len Torres, who is not seeking re-election, and Scott Mandel and Chumi Diamond. Green Party candidates Allison Blanchette and Joseph Naham are also running this year, as well as write-in candidate Runnie Myles.

Mandel, the only remaining council member first elected in 2011, as part of a Democratic sweep, who is running for re-election, and Diamond, who was appointed in February, both defended the current administration’s record. Both cited the turnaround of the city’s finances and recovery efforts after Hurricane Sandy, including a long-awaited coastal-protection project currently under way by the Army Corps of Engineers that the council approved in 2013, and its work on a proposed comprehensive plan to address future development.

At odds over finances

The GOP slate pledged to enact a two-year tax freeze and ease the burden on taxpayers in part by dipping into the city’s $9.4 million reserve fund, while also implementing greater financial controls.

“…There was never an independent forensic audit done of the city’s finances,” said Haas, a retired lieutenant commander in the Navy and a local operations manager for Verizon. “Our first order of business, to get a good idea of where the city’s finances are, we’re going to have an independent forensic auditor come in and audit our books. ...Long Beach is one of five municipalities on Long Island that are under fiscal stress.”

The Democratic incumbents said that since 2012, when Long Beach was on the verge of bankruptcy and had a $14.7 million deficit left over by the previous Republican administration, they have taken steps to improve the city’s finances. State Comptroller Tom DiNapoli issued a scathing report in 2013 that concluded that the prior Republican administration mismanaged the city’s finances and spent $21 million in reserve funds. As part of a deficit-reduction bond measure passed that year, DiNapoli now conducts what officials have described as “mini audits” of the city’s proposed budget each year.

Haas maintains that those audits did not review all of the city’s finances, and he and his running mates said that the days of blaming the previous administration are over.

“That was in 2008-09, and if you could show me a municipality that was doing well then, I would like to see that,” said Jones, a lifelong Long Beach resident, a former lifeguard and a sheet metal worker with Local 28. “We have no association with [the previous administration] whatsoever.”

The GOP slate blasted the developer iStar’s proposal to seek tax abatements to build luxury apartments on the Superblock property, and pledged to enact tougher ethics laws, repair the city’s infrastructure and push for zoning code changes as part of a comprehensive plan to foster “smart development” and access state and federal funds.

“I think we have an opportunity to restore residents’ confidence in City Hall,” Haas said.

Incumbents tout record

The council passed what it called the city’s sixth consecutive balanced budget in May. It stayed within the state tax cap, which council members attributed in part to improved financial controls that led to credit rating upgrades by Moody’s Investors Service. DiNapoli, a Democrat, said that revenue and expenditure projections in the most recent spending plan were reasonable.

Mandel, a State Supreme Court principal law clerk, said the administration has been transparent, and that the fiscal crisis and Sandy presented the city with enormous challenges. “The prior administration had to borrow and bond because they had to make payroll. That’s not the kind of borrowing we’re doing,” he said. “There’s a difference between having to borrow and bond due to mismanagement, whereas we’re doing it to either fund projects that are reimbursable by [the Federal Emergency Management Agency] or for infrastructure projects that required immediate action. No one likes to borrow and raise taxes, but it’s an easy answer to say we’re going to spend down our reserve funds — we’ve been there, and history has proven that it’s irresponsible management.”

John Bendo, president of the West End Neighbors Civic Association and an independent running on a Democratic ticket with Mandel and Diamond, said that he does not believe the city has been forthcoming about its finances.

“They’re living on a credit card … they’re borrowing excessively,” Bendo said. “We have to find out what the city’s financial condition really is. You only see the budget once a year — publicly, the city releases no quarterly budget versus actual reports.”

Bendo said that the city has used short-term borrowing to pay its bills, most recently a $6.8 million tax anticipation note issued in May that the city said was part of the Sandy recovery effort — funds that officials said were expected be received in eight to 10 months.

“There were a few times that they did a bunch of tax anticipation notes and then, when nobody was paying attention, 10 months later, repackaged them and re-bonded them as long-term bonds,” Bendo said.

Earlier this year, Moody’s Investors Service renewed its Baa1 rating on the city’s $113 million in outstanding general obligation debt, again noting a positive outlook and saying that the city has “an elevated but manageable debt burden.”

Diamond, also a State Supreme Court law clerk, said that the city is paying down its debt, and that there is a misconception that it has relied too heavily on borrowing. She added that the city has also pursued federal and state funds for infrastructure projects.

“I think it’s more of a political issue than a reality,” she said. “We see what’s happened in the county and different levels of government. The city doesn’t have that.”

Moody’s Investors Service has said that the city has “an elevated but manageable debt burden,” but noted that it could change based on the outcome of any litigation.

In 2015, the City Council voted unanimously to approve two separate borrowing measures, including a 15-year, $20.5 million bond initiative to pay two former owners of the Superblock following a state Court of Appeals ruling.

Last year, the council voted 3-2 to approve a $90.1 million budget, which included a 2 percent tax hike and a separate 4.3 percent tax surcharge to cover the remainder of the judgment.

The city may also be forced to pay a $50 million judgment to the developer Sinclair Haberman, after a state appellate court ruled that it defaulted on a decades-old lawsuit. And iStar has threatened to sue the city for $105 million if it does not show its support for tax breaks in a letter to the Nassau County Industrial Development Agency.

“This has been an issue that’s been kicked down the road, and it’s going to land in our lap,” council candidate Leah Tozer said of the Haberman case, “and it’s something we’re going to have to deal with.”

Diamond said that the city would continue to challenge the amount Haberman is seeking.

“If there is a judgment, we have to see how much that is,” Mandel said. “If it requires bonding, that will be the conversation. The last resort would, in my opinion, be to raise fees or to raise taxes. We’d have to look at every option available and make a decision that’s in the best interests of the residents.”