City facing budget crunch

It was only Day Two of her tenure as interim Long Beach city manager, but Donna Gayden, who worked in municipal finance in the Chicago area for decades, already knew that her new post would present a challenge.

That was why she took the job to begin with, she said in an interview in her fifth-floor City Hall office on Monday. The first challenge is the city budget, which is due to the City Council on April 10. The big issue: Long Beach has had two consecutive years of 8 percent budget hikes. Will voters stand for a third?

Gayden must present the council with a balanced budget. For her to do that, however, taxes must be raised, costs must be cut or other streams of revenue must be found. It is too early, she said, to determine which course she will take.

She has scheduled a series of meetings with city department heads to discuss their budgets. She said she would explore economic development opportunities as a way of raising new revenue. And, Gayden said, she met with State Sen. Todd Kaminsky, a Long Beach Democrat.

“I will be talking to him, and coming with a list” of what Long Beach needs, she said.

“I wish City Manager Gayden well in her new role,” Kaminsky said, “and eagerly await hearing the city’s priorities so I can get to work securing more funding to improve the community.”

The heat is on. State Comptroller Tom DiNapoli’s office recently released a scathing report on the city’s financial condition, and an ongoing payout scandal is still under investigation by the Nassau County district attorney and the U.S. attorney for the Eastern District of New York. In fiscal years 2017 and 2018, roughly $750,000 in separation payouts were made to about a dozen current and former city employees, including former City Manager Jack Schnirman, who is now the county comptroller. Schnirmanreturned about $52,000 in payout money.

City officials are banking on the 59-year-old Gayden’s lengthy municipal finance experience to reverse the downward slide. She most recently served as interim finance director for the Illinois cities of County Club Hills and Bradley. She holds master’s degrees in accounting and tax law, and has certificates in state and local government from the Harvard Kennedy School; in leadership and management from Governors State University; and in investigation and prevention of commercial fraud, and cash management fundamentals, from Northwest University. She is a certified fraud examiner, and an International City/County Management Association-credentialed manager.

The City Council stated in a news release that it decided to hire Gayden after ”years of structural deficit, mismanagement and scandal.” She is the first woman, and the first African-American, to hold the job. Her appointment was approved 4-0 by the council at a special meeting on Feb. 27.

“I came here for the challenge,” she said. “What I do best is what I’m trying to do here — getting the city on track.”

Her hiring comes at a time of significant change for the city. Two weeks ago, the council held a public hearing on a proposal to revise the 81-year-old city charter, and strip the city manager of the authority to hire about a dozen key personnel, including the police and fire commissioners. A vote is to be held on the proposal soon.

Gayden took over from John Mirando, who told council members on Feb. 24 that he wanted to step down after only six months in the job. Long Beach has had three acting city managers in the past two years, and no one permanent since Schnirman left in 2018.

At the Feb. 27 meeting, Gayden sat in the front row while council President John Bendo lashed out against previous city councils and city administrations for causing Long Beach’s fiscal problems. “The number one problem is finances,” he said from his center seat on the council dais. “For years this city has been spending more than it brings in. The city is in an unsustainable trajectory. We needed somebody from outside who owed no favors to anyone. Politics got us to where we are now.”

“The vitriol and venom has been disgraceful,” Bendo continued, referring to the snappish political climate that has characterized the city’s politics for years. “We should be a little ashamed of ourselves. The person [we hire] must have a thick skin. We need someone with an iron fist and a velvet glove.”

Bendo said that Gayden was hired with the help of an executive-search firm and had been vetted by the council.

Gayden signed a six-month contract, at a salary of $178,000. According to the contract, she can be hired for at least one additional three-month period. City officials said that over the past three years, city managers have had annual salaries of $174,000, but Gayden will not have health benefits. As a result, Bendo said, Long Beach “will be saving money.” He said she plans to live in the city’s West End.

Resident Roy Lester, a former Board of Education trustee and president, raised an objection at the meeting to “the way [the hiring] was done.” The public, Lester said, was given only 24 hours to digest the news of Gayden’s hiring before she was sworn Feb. 27, and he wondered why the hiring could not have waited until Tuesday’s regular meeting.

The council, Lester said, should have made the hiring after it passed a revised city charter.

Bendo responded that the city needed to get Gayden working as soon as possible. “She needs every minute humanly possible,” he said.

Gayden received a round of cheers after she was sworn in.