Long Beach City manager marks year full of challenges

Donna Gayden, who had been a municipal finance expert in the Midwest, became Long Beach’s city manager a little over a year ago. She is already preparing to move on.

But not quite yet.

Gayden, Long Beach’s first female and first Black city manager, was hired to straighten out the city’s then widening financial crisis, the result of years of fiscal mismanagement by previous administrations, current City Council members have said. Over the past year, Gayden also had to navigate the coronavirus pandemic, following often complicated state guidelines on how restaurants, bars and stores could operate.

The beaches were another issue. Last spring, large crowds gathered on the boardwalk, raising fears of Covid-19 spread. The city initially opened the beaches only to residents, but later, when coronavirus cases dropped, it allowed non-residents to use them as well.

Gayden quickly assembled a team to tackle the task of restoring order to the city’s finances. Her no-nonsense, business-like style helped her bring in a budget last year with a 1.8 percent tax increase, the lowest in years. She also put forward a five-year plan to guide the city’s finances, which includes the monitoring of all expenses, a search for new sources of revenue and the updating of the city’s financial and other records with computer systems.

“I’m a team player, and we put together a team,” Gayden told the Herald earlier this week. “I hope we’re in a better position, but it’s not exactly where we want to be.”

Last week the city announced a memorandum of agreement with the paid Fire Department, allowing for the hiring of three new firefighters, including the city’s first female firefighter. The city remains in negotiations with the police union, the Long Beach Police Benevolent Association.

Gayden’s one-year contract has been extended until August, with another three months added to that. She said she would discuss her future with the City Council at a later date. Last August, she received a 6 percent salary raise, to $190,000 per year.

But, she added, there is much work to be done. One of her most important projects is developing a budget for the next fiscal year. That spending plan is due to the City Council on April 10.

“We’re working on it now,” Gayden said. “We have a lot of factors to consider.”

Can she promise a budget without a tax increase? No, she said, quickly adding, “But the goal is always to have a small increase.” Last year’s spending plan relied on layoffs, with a number of those employees returning to their posts when money became available.

Another challenge will be to resolve a $131 million lawsuit filed by a Manhattan developer, Haberman & Haberman. In January, State Supreme Court Justice Jack Libert ordered the City of Long Beach to pay Haberman $131.2 million for blocking construction of oceanfront condos over the past three decades.

Given its financial woes, the city does not have the money to pay Haberman back in full. Gayden said that the matter remains in litigation, and she could not comment, except to say the city is working to resolve the issue.

Last spring, Long Beach borrowed $4.2 million from Capital One Bank. The City Council voted to borrow the money at an interest rate of 2.25 percent. That will cost the city $96,000 in interest at the end of the next fiscal year, but the payment can be extended for another year after that. The borrowing has raised concerns among some residents.

Over the course of her career, Gayden has moved about the country, from one financially distressed municipality to another. Before coming to Long Beach, she had worked in two small municipalities in Illinois.

City Council President John Bendo said at a recent meeting that Gayden did not intend to remain in Long Beach for the remainder of her career.

The council announced that it was seeking a deputy city manager. Gayden said that person could be “groomed” to take over her job.

Elections are approaching for three City Council seats. Ten candidates have announced that they will run in a June 22 primary.

Meanwhile, the credit-rating agency Moody’s has downgraded the city’s bonds to one notch above junk, in part because of “a consistent turnover at the highest levels of city management.”

Kevin Heller, a Democrat running for City Council on the new Long Beach United Party ticket, is a senior vice president at a diversified alternative asset management firm. Gayden, Heller said, “was brought in to make significant changes to Long Beach, but Moody’s has us at one notch above junk bond status.” He added that he did not see a strategy for settling the Haberman suit.

Leah Tozer, a Long Beach real estate broker and a Democrat who is also running on the Long Beach United Party ticket, said of Gayden, “She’s doing a good job with what she’s dealing with. What I do like is she seeks input from the public, but there’s a lot more that needs to be done.”

Roy Lester, a bankruptcy attorney in Long Beach who follows city politics, said that Gayden has done well given the task at hand. He added that her departure would hurt the city’s reputation — and its Moody’s rating.

Despite the challenges, Gayden said she is happy she came to Long Beach. “It’s a great city,” she said. “We’re moving forward.”