City officials propose 2011-12 budget

Long Beach City Manager Charles Theofan presented the proposed 2011-12 budget last week, saying that it maintains services and includes no tax increases.

Theofan offered the $83.9 million budget — a $4.7 million increase over the current spending plan — to the City Council on April 12 for review, and said that despite a rough economy, “We have not only provided a proposed budget without a tax increase, but one that was achieved with no reduction in personnel and no cutbacks of city services.”

He attributed most of the increase in expenses to contractual raises as well as increases in payments to the state pension fund and rising medical insurance premiums, as well as an expected steep decline in mortgage taxes.

Theofan explained that the city would utilize $1 million of its reserve fund to avert a tax increase, reducing the fund from $3.8 million to $2.8 million.

“In my professional opinion, a $2.8 million reserve fund leaves the city in a fiscally sound position moving forward,” he said in a statement. “This administration is committed to ease the tax burden of families who are already trying to keep their heads above water. And with this budget, we once again come through to ease that burden.”

Although the budget holds the line on taxes, Theofan cited several challenges in the coming months, including ongoing negotiations with the Police Department and the paid Fire Department.

Democratic City Councilman Len Torres said that while he supported keeping taxes stable, he worried about the overtime expenses and retroactive pay that would be negotiated by the police and firefighters’ unions. “The overtime pay is a big one — what are they doing to manage the cost of overtime?” Torres said. He added that from what he has seen so far, overtime costs for the Police Department have jumped 150 percent this year, more than twice the amount budgeted in the proposed spending plan.

“What we’re seeing is that there really hasn’t been a tightening of the belt,” Torres said, “and we continue to spend. I think that there could have been a little bit more done to save money.”

Torres also said that if the city reaches an agreement with the Police Benevolent Association — it has been two and a half years since its contract with the PBA expired — he fears that the city will dip further into the reserve fund to cover retroactive pay. “… [I]f we have costs associated with police, that roughly $2 million in reserves — half of it would be gone.”

Another concern Torres mentioned is the North Park’s aging water tower, which, he said, needs to be replaced. “What they’re doing with the water tower is maintaining it, not building a new one,” he said. “It’s so old that if it were to fail, we would be in a lot of trouble; we would have to pump in water from a barge. But we have no real reserves to do that right now.”

Torres said he has formed a “think tank” made up of local residents to review the budget and craft an alternative plan. Last year he and Councilman Mike Fagen voted against the current spending plan after proposing potential cost-saving initiatives, including the elimination of the Police Department’s Marine Bureau.

“We were a little late submitting it, and what we want to do is avoid that situation this year,” Torres said. “We want to provide an alternative budget with cost-saving measures [for] certain things we don’t need.”

Councilman John McLaughlin said that while overtime is always a concern, sometimes there are unforeseen circumstances that are out of the city’s control, such as the post-Christmas blizzard. “Unfortunately, with the fire and police, overtime is not something you can schedule,” McLaughlin said. “You’re stuck with a certain amount of manning that you need on any particular day, and there are issues such as sick days, injuries and vacation time. There’s not much you can do to control that.”

McLaughlin added that despite Torres’s concerns, the city would not use reserve funds to cover any costs if an agreement is reached with the unions. He said that it was too early to determine what those costs would be, since an arbitrator rules on retroactive pay, but noted that they might have to be funded through a public bond initiative.

“We have no idea what … the retroactive pay is going to be,” McLaughlin said. “Torres can speculate what it’s going to be, but the arbitrator can say it’s zero. We brought forth what we thought was a fair contract and that didn’t seem to resonate with the police, and we had to go to an arbitrator,” he said of the current negotiations. “Is the arbitrator going to bury the city? Is the arbitrator going to put those costs on the back of the city to pay for a raise that we don’t agree with?”

McLaughlin said that city officials took a page from Gov. Andrew Cuomo’s playbook by tapping into reserve funds this year, adding that he feels the budget is sound. “You try to do what you can to put forth a fair budget, and I think we’re going to do well this year on revenues,” he said. “I think the surf contest in September is going to bring a lot of revenue into the city.”

Theofan said that Long Beach continues to reduce spending through consolidation and centralization of departments while it seeks new revenues and alternative sources of funding for renovations of the Recreation Center and upgrades of the sewer treatment facility. He explained that the city portion of their property taxes account for only one-third of the average homeowner’s tax bill, while the remaining two-thirds go to the Long Beach School District and Nassau County.

Last year, the current budget passed after the City Council voted 3-2 to approve it. Under the current budget, the city’s property tax levy increased by 3.1 percent, with property tax increases averaging $64 for a West End bungalow, $110 for a two-family home and $277 for waterfront homes and condos.

A hearing on the proposed budget will be part of a City Council meeting on May 17, with a second meeting set for May 24. By law, a budget must be adopted by May 31. A copy of the proposal is available at www.longbeachny.org and at the Long Beach Public Library.

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