Long Beach City Manager Donna Gayden, who was first hired in February 2020 to help the city climb out of a deep financial hole and who was believed to a short-timer, has signed a new contract that will take her through the end of 2023, the city announced Friday afternoon.
The new contract comes with $203,000 in base compensation, an increase of $13,000 over her current pay, an increase of 6.8%, that the city said “right-sizes her salary within the executive members of the city workforce.”
Additionally, the city will pay $17,000 in wages that will be dedicated to an IRS 457 deferred compensation pension plan.
The announcement came as a surprise to city hall observers. In March, the city said it was seeking a deputy city manager to take over the city’s top management post, anticipating that Gayden might leave the top post. City Comptroller Ina Reznik was named deputy manager. Gayden is Long Beach’s first female and first Black city manager.
But in August, the council approved a $190,000 contract for Gayden through November, a move council members say is a vote of confidence that she will improve the city's economic footing.
Gayden, 60, had been described several times as an itinerant manager who would remain in her Long Beach post until the city’s financial problems were resolved.
They are not. John McNally, the city’s spokesman said Friday that Long Beach’s debt remains large. He said also that Wall Street bond rating agencies have long complained that the city needs to show “stability and continuity” in governance.
The contract is expected to be unanimously approved by the City Council at its regular business meeting on November 16th. A copy of the agreement will be made available on the City’s website on Friday, November 12th.
Roy Lester, a Democrat who was elected to the city council in the Nov. 2 elections, said he plans to bring up the new contract at Tuesday night’s city council meeting. He declined to comment further.
City council president John Bendon said in a statement, “Donna came to Long Beach just as our world was entering crisis mode with the pandemic. She led us through this turbulent and uncertain time and has demonstrated a degree of fortitude and no-nonsense leadership to help the Council address years of decay in the City’s operations.”
"On behalf of the entire Council, we are thrilled and fortunate that she chooses to exercise her vast skills in our community and look forward with great anticipation to the ongoing rebirth of our city,” Bendo said.
In a statement, Gayden said, “We’ve taken some good steps but there is still a great deal ahead,” I appreciate the Council’s trust in our team’s ability to correct years of dysfunction, and moreover, I am proud to call myself a resident of this community. Long Beach is a beautiful community that is one of Long Island’s jewels. We will do all we can to polish this stone.”
Bendo and Gayden, referring to previous city administrations, said “Our community no longer will tolerate political favoritism and loose accountability,” he said. “This contract calls for the definition of measurable expectations, something that will best serve our taxpayers and stands as a model for others who want to join our team in the future.”
Gayden holds advanced degrees in tax law and accounting, along with multiple professional certifications in fraud examination, prevention and governmental leadership.
Gayden had been a municipal finance expert in the Midwest. Over the past year, Gayden had to navigate the coronavirus pandemic, following often complicated state guidelines on how restaurants, bars and stores could operate. The beaches were another issue. In 2020, 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 the 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 recently happened for three City Council seats and ten candidates had 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.”